SPOKANE, WA - The price at the pump is rising, not just locally, not just nationally, but around the entire world.
Classic supply and demand brought us lower gas prices at the height of the pandemic and now that people worldwide are driving much more than they have been gas prices are skyrocketing, up almost a dollar in the last month.
A year ago the average price of regular gas in Washington was $3.26. A month ago it was $4.05. And now? It's over a dollar more than we saw this time last year, at $4.74. It's gone up already 30 cents since last week. And Spokane isn't doing too much better.
As gas prices rise, it doesn't only impact consumers' wallets, but businesses too. Think about how many times you've ordered food for delivery? According to Fundera, 31% of American consumers use 3rd-party food delivery services at least twice a week. Uber has even added a surcharge on fares and deliveries in the U.S. And Canada.
One local company, Treehouse Deliveries, is also feeling the impact of the price surge.
"A couple of our drivers had reached out to us and talked about gas prices. And so they had the idea of increasing base, the base delivery fee," Neil Holford, the Owner of Treehouse Deliveries said.
Raising the base rate a dollar was the only solution Holford could think of so as to not lose any drivers.
"Just raising that base price, just give them a little bit more to live in more room to make money at the end of the day, instead of just breaking even," he said. "They'll quit when they start to not make money. When it starts not making sense."
It's a balancing act because raising prices could come at a cost.
"The casual customer we'll probably lose them," he said. "But I know that when we put out a post the other day on Instagram and Facebook, we got a couple messages and comments saying they understand. As long as we can keep it at an appropriate level that they're making. Making money and also keeping it to where the customer is willing to pay. I think they'll keep doing it at least with us."
Of course, adding a cost isn't always taken lightly and Holford isn't the only business owner making tough calls.
"I'd say just over the last year, they've probably seen about a 25% increase in cost but it's hard to notice that because they are small little changes when you shop online but overall it's a big change," Tim Chernetskiy, one of the owners of Victory Final Mile, said.
Over at Victory Final Mile, a business that delivers large items within a 100-mile radius for companies like Furniture Row and Forward Air, is also balancing cost to the consumer with maintaining a sustainable business.
"We saw a 34% increase in our total fuel cost. That was about a week and a half ago," Chernetskiy said. "We don't usually see these types of increases unless it's a holiday season when we know we're going to be doing more deliveries, have more trucks out but seeing this right now so early on in the year was like a big exclamation mark, what's going on?"
Chernetskiy said he's been forced to raise his prices even more now.
"Our service rates did not cover such dramatic increases in the fuel cost so luckily our customers have taken it well," he said. "But what worries us is that if this continues going there's going to be a breaking point where we will not be able to recoup the additional cost which would hurt the bottom line which would hurt the business and also it sucks for the consumer who would have to probably have to pay an additional cost for shipping."
And if gas prices continue to rise, like some analysts expect, as full circles go, employers will find it harder to keep employees and consumers will feel that heat too.
