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You've Got Gas, or Not

June 26, 2008 By:
Aaron Passman
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Steep gas prices have meant a pinch at all the pumps along City Avenue.

It's a 60-mile drive round-trip from Yardley to West Chester, and David Kleinman does it every day, regardless of the price of gas.

"Fortunately, I have a four-cylinder manual transmission vehicle," said Kleinman, who works as program manager at Kesher Israel Congregation in West Chester. "Unfortunately, it's a turbo engine, so it requires premium gas. I use up a quarter tank, which is almost four gallons a day, just going back and forth."

Because of that turbo engine, Kleinman's Volkswagen Jetta uses 91 or 93 octane gas, depending on availability, which leads to him pay on average around $4.25 per gallon -- that's roughly $60 per week for Kleinman's 14-gallon tank, just to get to and from work.

Kleinman said the frequent fill-ups had definitely cut into his discretionary spending: "I've consciously not gone places I might have wanted to go, such as dinner out with the family, or even just taking a ride somewhere," he said.

"You've got to go to work," he said, "but other than that, I'm very careful."

While most people use 87 octane gas, generally the cheapest option available, many consumers are feeling the pinch at the pump this summer as prices rise above the $4-per-gallon mark. Some area gas stations still have prices just below $4, but at press time a few stations were charging more than $4.34 for a gallon of regular gas, according to PhillyGasPrices. com. The Web site is designed to reflect user-reported price trends over the most recent 36-hour period. AAA Mid-Atlantic listed the Philadelphia area's average gas price at just over $4.13 per gallon (up more than $1 from last year), just a few cents above average for the mid-Atlantic region, according to statistics from the government's Energy Information Administration.

What we pay at the pump is composed of four factors: the price of crude oil; the cost of refining that crude oil into gasoline; federal and state taxes; and distribution and marketing costs. Crude oil, currently around $135 per barrel, makes up the majority of the cost -- 75 percent, according to statistics for last month, followed by a split among the other three factors, according to EIA statistics.

Getting 'Smart' 
Some consumers are turning to more fuel-efficient vehicles as a way to cut down on their gas costs, such as hybrids and Smart cars. The tiny, two-passenger Smart car has been popular in Europe for years, but only debuted in the Philadelphia area this January with the opening of Smart Center Devon. To promote the car, and because only a limited number are available, the dealership works on a $99 reservation basis. Customers who ordered the car this month would likely have their vehicle available in January of next year, said general manager Tom Lathbury.

"The biggest reason people are coming in now is fuel savings," said Lathbury, adding that many consumers also liked the car's eco-friendly design and production.

"People with SUVs want to park the SUV and drive something that's fuel-efficient," said Lathbury.

One satisfied customer is Steve Friedrich, who said he was one of the first in the area to buy a Smart car.

"I've had it since February, and I've more than doubled my mileage," said Friedrich, who serves as executive director for Temple Sinai in Dresher. "I've got an 8.7-gallon tank, and it gets about 45 miles to the gallon. I still fill up once every 350 or 400 miles, which is what I was doing in my other car, but I have half the tank size."

Like Kleinman, his colleague at Kesher Israel, Friedrich also has a lengthy commute each day, driving 40 miles round-trip from his home in Broomall to his office in Dresher. Friedrich's previous car was a Dodge Stratus, which he drove for five years.

"I knew I was due for a new car, so last year was when I started thinking about it," he said. "Smart had announced last year that they were having this reservation program, and [since] most of my driving was solo, it made sense looking into it." Friedrich said that, when the cars came out, they were "fun to drive," got good mileage and seemed a good fit for him -- he's already put 6,000 miles on the car since getting it in February.

Friedrich said the high gas prices (as well as increased airfares because of rising fuel costs) had led him to change his summer plans: He intends to take his family to New York City, rather than a distant destination like Hawaii.

Bob Parkin, on the other hand, is doing his best not to let gas prices cramp his style.

"I'm not going down the shore this year -- but I didn't go last year," said Parkin. "But am I going to drive to Florida? Absolutely. Only this year, it's going to cost me $500, instead of $300." Parkin said he and his wife had been spending winters in Florida for the past 30 years, and he had no intention of stopping now, despite the high gas prices, though he said he was luckier than others because he could afford to live with the prices.

Parkin makes his living as the owner of Blue Bell Motorcars and speculated that gas prices in the area could hit $5 by the end of the year. He said that while many of his customers were looking for "little four-cylinder cars, naturally, in my personal opinion, I think the market's going to level off after the summer and people are going to start to buy bigger cars -- SUVs and minivans. But they're going to use them sparingly, only when they need them."

While the pain at the pump is affecting some people's summer plans and daily life, it doesn't seem to be keeping people from going to synagogue -- at least for now. Officials from several area congregations said they had seen no difference in shul attendance, despite rising fuel costs for the commute to worship services.

"Fortunately, we're not that far away from our congregants," said incoming co-president of Temple Shalom, Alan Rosenberg. "We're not that densely Jewish in Levittown here, but we do draw from all the surrounding communities, so you do have to drive to get here." Rosenberg said he hadn't heard complaints yet from congregants about high gas prices affecting whether or not they attend shul, but he worried it could be coming if gas prices continue to rise.

"We're finding that there's a little more carpooling going on, and a little more conservation," said Friedrich. "We're seeing more hybrids in the parking lot as people are starting to switch cars out. Instead of taking the gas-guzzling SUV to shul, people will take the sedan where possible."

Other Options 
For those who choose to leave the car at home and skip the high prices, there are other options. Philly Car Share has seen a 40 percent increase in applications so far this year, according to co-founder and deputy executive director Clayton Lane. The group expects to sign up its 50,000th member this month.

"As the cost of owning a car continues to rise and the cost of gas affects the economy, we're seeing an increasing trend of people switching from owning cars to sharing them," said Lane, also citing recent increases in transit ridership.

Philly Car Share members reserve blocks of time for a car they pick up and return to a designated location. Hourly and daily rates are available, plus a mileage fee, and the costs of insurance and gas are included. Members also have access to Philly Car Share's gas card in case they need to fill up. Lane said he did not expect rates to change because of gas prices. Rates rose by 9 percent earlier this year, though Lane said gas was not a major factor in that increase.

"We hadn't had a price increase in four years, so we're making up for four years of inflation we hadn't covered in the meantime," said Lane.

Hybrids make up half of Philly Car Share's fleet of 475 cars, and Lane said the group encouraged people to drive them by offering incentives, including the company's lowest rates.

The high cost of filling up has also meant booming business for SEPTA. The transit organization reported that, while total ridership has risen 5 percent to date from last year, regional rail had seen an 11 percent increase to date. According to SEPTA press officer Gary Fairfax, 123,000 riders now use SEPTA's regional rail each day.

Fairfax also said SEPTA was able to lock in rates for gas over certain periods of time, including a $4.03 rate per gallon for all buses during the month of June. However, Fairfax said that the rate would "increase substantially next month, if fuel prices don't stabilize."

SEPTA officials have approved a $1.095 billion budget for the 2009 fiscal year, approximately $15 million more than originally proposed, due to rising fuel prices. Fairfax said SEPTA expected its ridership gains to help offset the increase in fuel costs and that the approved budget did not include any fare hikes.

'Double Hit' 
Pennsylvanians' gas woes are not being ignored by elected officials. At a recent press conference addressing the issue, Sen. Bob Casey (D-Pa.) urged the passage of legislation that would limit oil companies' excess profits, and pushed for crackdowns on market speculation and investigations into price gouging. The senator recently sent a letter to the Federal Trade Commission urging investigation into price gouging and price manipulation.

"If legislation were enacted it would have an impact in the near term -- not days or weeks," but in the near future, said Casey. He pressed the need to fund the search for alternative energy sources: "The mother of invention might be necessity, but you've got to fund it," he said.

Casey expressed worry that consumers could end up with a "double hit" of high gas prices this summer, and high heating bills come winter.

His Republican counterpart, Sen. Arlen Specter (R-Pa.), has been a proponent of drilling in the Arctic National Wildlife Refuge as a way to drive down the cost of oil. He has also supported legislation to strip OPEC companies of anti-trust exemptions as a way to put pressure on them to increase production.

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