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Gas pains: Companies struggle to keep up with skyrocketing fuel prices

With gasoline at over $2 a litre, transportation companies have been forced to make adjustments. B.C. Transit has noticed an increase in ridership.
Al Hasham, president of Max Couriers, says fuel costs are changing too fast for his rates to keep up. While he’d like to have more electric vehicles in his fleet, he says they’re hard to find. VIA AL HASHAM

Companies that depend on gasoline to do business are tightening their belts after a significant jump in gas prices.

A litre of regular-grade gas in Greater Victoria Tuesday afternoon was selling for $2 to $2.17, with the majority at $2.09. That’s up from $1.949 last week, and $1.769 a litre prior to that.

“We used to monitor gas prices monthly — now we have to do it daily,” said Al Hasham, president of Max Couriers. “I have sent out an email informing [customers] of a three per cent increase in fuel surcharge costs. But the real increase is actually closer to eight per cent, which means we are eating five per cent ourselves this time. We can’t keep changing our rates on a daily basis.”

Hasham believes customers understand the situation globally and how it affects their costs, because he has not received any angry correspondence since the announcement. He has four electric cars in his fleet of 35, which helps to soften the blow for deliveries of small items or envelopes. He said he would love to increase that number, but he can’t find any EVs that are available.

With some deliveries involving large, bulky items on skids, there is no cost-efficient alternative to fossil-fuel-powered trucks and vans. The company has tried to cut costs by making deliveries more efficient, loading 40 to 60 packages into a vehicle that would only carry 30 to 40 in the past.

At B.C. Transit, this year’s fuel budget is based on an estimated diesel price of $1.36 a litre, a far cry from the $2.11 a litre that motorists around Victoria are having to pay today.

But fares won’t be going up anytime soon, said Jamie Weiss, senior media relations and public affairs adviser at B.C. Transit. That’s because although operating costs are affected by fuel prices, the transit company receives a discounted price under its existing fuel contract.

B.C. Transit has introduced 36 compressed natural gas buses into its fleet to help mitigate the impact of diesel fuel price increases, and plans to eventually transition to a full zero-emission provincial fleet by 2040.

It says it had already experienced a noticeable increase in ridership this week, before the gas-price hike, and plans to monitor ridership data and trends to ensure service levels can handle the demand.

Rising fuel prices won’t directly affect truckers or freight-hauling companies, says an industry representative.

“Most companies operate under long-term contracts, and almost all contracts have fuel surcharges built into them” for when prices rise, said Dave Earle, president of the B.C. Trucking Association.

“Although we pay fleet rates for fuel, the extra cost just flows through and gets passed on to the consumer. It’s just one more inflationary pressure.”

The industry is, however, struggling with a shortage of drivers. Earle said consumers will likely see the fuel increase reflected in their next food bill, electronic gadget and anything else the industry hauls.

The increase will have a profound effect on the finances of BJ Roberts, who has driven taxi cabs for the last 40 years.

“It’s the small guys at the bottom that get hurts the most,” said Roberts, who drives for Victoria Taxi. “I know what’s going on and I fully support the people of Ukraine. But it’s a crazy merry-go-round with prices constantly going up.”

He called on B.C. Premier John Horgan to follow Alberta Premier Jason Kennedy’s example in removing the provincial fuel tax to provide temporary relief for struggling consumers.

Roberts estimates he now pays approximately $33 for the 300 kilometres a week he drives, a sum that has doubled since last year.

Because he leases the vehicle he drives from the company, the only other relief from rising costs would be if the owners drop the amount of his lease.

If you are planning to cut your dependence on oil by switching to an electric car, you may have to wait a bit as manufacturers scramble to keep up with surging demand amid a chip shortage.

“Even before the latest hike, we have had three times more enquiries about electric cars,” said Rick Rooda, sales manager for Campus Nissan. “Unfortunately manufacturers haven’t been able to keep up with demand due to a global chip shortage. We are telling customers to be prepared for a six-month wait at this time.”

People looking to save by buying a used electric vehicle won’t get a break either, as those are in short supply as well.

“I received five used electric vehicles today and I have already sold two of them,” said Rooda. “It’s a real eye-opener.”

Nissan has been manufacturing electric vehicles since 2012 and its least-expensive electric car is $39,000, minus $8,000 in government incentives.

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