Not so long ago, Northwest D.C. florist Karen Woods could plan to spend about $100 per week on gas to make whatever deliveries she needed to make in the region. But with the recent surge in gas prices, the weekly cost of gas for Woods has more than tripled to close to $350.
Woods says she is reluctant to raise delivery fees and pass on the cost to her customers, particularly since the vast majority of her business is funeral work that involves grieving families already beset with the cost of funerals and burials. “I don’t think the consumer should be penalized,” said Woods, who runs Mary Woods Florist, located on the 900 block of Kennedy St., N.W. “They’re in as much of a problem as we are.”
At the same time, Woods said, something has to give. “At the moment, I’m absorbing it,” Woods said of the rising cost of gas. “But I don’t think it’s exactly fair.”
Woods’ predicament represents what many D.C. business owners are facing as gas prices in the District continue to hover above the $4 mark, putting the District among the four states in the U.S. where gas cost that much or more.
Among the most severely impacted are those who, such as Woods, run businesses that rely heavily on transportation.
“I think, ultimately, it does get passed on to customers,” said Bill Keating, president of Urban Service Systems, a D.C. waste management company. “It may not happen right away,” Keating said. But at some point, he said, prices need to catch up to reflect rising fuel costs.
Taxi drivers are among the most heavily impacted since their rates are fixed, and the situation has directly impacted the way taxi drivers get business, said Nathan Price, chairman of the DC Professional Taxicab Drivers Association.
“A driver can’t afford to ride around looking for jobs anymore,” Price said. “If you cruise the street looking for a job, if you ride around for a half hour, maybe you burn a gallon of gas.” But if cruising the streets only results in a $6 fare, Price added, “You have lost money working.”
So why are gas prices so high in the District? The factors are both local as well as global.
From a broad perspective, gas prices are generally high “because of speculators driving up the price to make quick profits,” says Daniel J. Weiss, senior fellow and Director of Climate Strategy at the Center for American Progress.
He said the U.S. Commodity Futures Trading Commission, the body that polices oil trades, needs to have stricter rules to limit the kind of trades that can be done in order to keep speculators from driving up the prices. “That’s the first step,” Weiss said, explaining that Republican forces are opposed to giving the commission more power and recently moved to cut its budget by two-thirds.
“The second step is we need to have much more fuel-efficient cars that get 60 plus miles per gallon by 2025,” Weiss said. “It’s very realistic. The technology exists to do that today.”
Beyond that, he said, elected officials must move to stop big tax breaks for big oil companies. He also said consumers need to take small but practical cost-saving steps, such as combining trips, to curtail their fuel-related expenses. Woods, the florist, said she is already doing that by trying to cluster her deliveries and only going downtown and to southeast once a day.
But beyond trade and tax break issues, other local factors help drive up the already high price of gas even more in D.C., said John B. Townsend, spokesman for the AAA. Those factors include the high cost of D.C. real estate. He also cited a recent news article that revealed the fact that nearly half the gas stations in D.C. – 240 – are controlled by Joe Mamo, an Ethiopian immigrant who was described as the city’s “Gas-Station Master.”
Though Mamo has been accused of raising rents and the cost of gas and forcing other gas station owners to raise their prices, Mamo denied doing such, the article states.
But local affairs aside, gas prices would still be high. Townsend said that Wall Street investment houses and hedge funds are looking for “the next big thing” and seem to have found it in crude oil.
“That’s what’s causing the prices to increase,” Townsend said, “…all this money going into gas commodities and crude oil commodities. The commodity market has become the haven of people trying to invest their money and make a killing.”