Arab protests bring gas price hikes in the suburbs

Protests across the Arab world are having an immediate effect in suburban Chicago in the form of rapidly rising gas prices.

Unrest rocking Libya is threatening oil supplies, with uncertainty in the market driving up the cost of crude. Although that higher-priced oil is only now, in effect, entering the pipeline, gas companies aren't waiting to hike prices in response.

According to the AAA auto club, the price of a gallon of regular gas in Illinois rose to $3.35 Thursday, up five cents from Wednesday and 12 cents from just a week ago. And that's having a ripple effect on all facets of the economy, just as it did in the summer of 2008, when prices peaked at $4.11 nationally and $4.25 in Chicago.

“Our sales associates seem to catch a lot of flak. But those people are pulling at the wrong end of the chain,” said Bill Fleischli, vice president of the Illinois Petroleum Marketers Association in Springfield, which he said either owns or supplies gas to more than 90 percent of the stations in the state. “It's happened before with political unrest in one or two countries. Now you have the whole region. The market panics because it thinks the supply will be disrupted, and it has been disrupted.”

“Unfortunately, I don't think I can do too much differently but accept the gas prices,” said Timothy Graham of Arlington Heights, as he fueled up at the Citgo at Dempster Street and Elmhurst Road in Mount Prospect. “I use the car for the job, so I don't think there's any way around that for me.”

“The only time we ever saw people really change their driving habits was when gas was over $4 a gallon,” said Beth Mosher, spokeswoman for AAA Chicago, based in Aurora. “Gas prices are extraordinarily high for this time of year, the highest we've ever seen in February. But we're not there yet.”

If the increased cost is a drain on the pocketbook to most, it benefits a select few.

“In 2008, that's the year we set the record for ridership” with more than 85 million rides, said Metra spokesman Michael Gillis. “There is a relationship there. As gas prices go up, people drive less and ride more. And we saw that in 2008.”

Yet, gas prices ended last year higher than they did even in 2008, at more than $3 a gallon, and they've only gone up since. Gillis said it's too soon to say what effect recent gasoline price hikes are having on Metra's commuter rail ridership.

But gas prices threaten to blow a hole in the budgets of agencies that rely on gas, such as the Regional Transportation Authority at large and suburban Pace bus service in particular.

“When fuel prices start to rise, we see ridership go up, bringing in more revenue,” said Pace spokesman Patrick Wilmot, “but that almost never offsets the actual cost in terms of the increased price of gas.”

Wilmot said Pace benefits from buying in such large quantities, locking in its prices quarterly, and from not having to pay state or federal taxes as a government agency, “but we definitely go through those spikes, too.”

As a result, “we're pretty conservative,” he said, budgeting in 2011 for gas prices 15 cents more a gallon than last year. Wilmot said gas costs were running below budget until just recently, and Pace will be fine if gas prices stabilize or return to previous levels. Yet if they go to $5 a gallon, as some oil executives recently said is possible, it will cause headaches.

Many private firms also would scramble.

“We would have to, obviously,” said Trip Bellows, chief operating officer with Davidsmeyer Bus Service in Elk Grove Village, part of the national Mid-America Charter Line.

Yet, much of Davidsmeyer's business is independently chartered, such as for group trips and athletic teams, and the costs can be passed on if they rise beyond a certain point, he said.

“We would notify our customers that we put a surcharge on the price of gas,” he said. “You're not raising their rates. What we're doing is exacting the increased cost. In this day and age, everybody knows gas prices are going up.”

Wilmot and Bellows both said it helps to have dealt with previous spikes, as in 2008. Yet, “it was a totally different situation” three years ago, Bellows added, and the overall economy seems stronger now and better prepared to deal with a short-term gas increase.

Other merchants, however, were concerned about the possible impact of long-term increases.

“People are really upset,” said Omar Zubairi, owner of the Fox River Cafe & Deli in South Elgin. “The combination of the economy and the gas prices is not good for business.”

W.C. “Buzz” Miller of Batavia said he drives up to 4,000 miles a month for his Du-Call Miller Plastics manufacturing business, covering an area with a 200-mile radius. He said his car takes premium gas, and it now costs $65 to fill the tank. “I bite the bullet,” he said. “You don't have a lot of choice.”

“I think that we have to start using our natural resources in this country,” said Gail Howard of Long Grove. “Even if it takes 10 years, it's critical because we are absolutely slaves to the Middle East at this point, and other parts of the world don't like us very much. I certainly will do what I can. I think we all do that when things are tough especially. It's up to our politicians to start lifting the economic barriers that keep us from harvesting our own natural energy.”

“Unfortunately, the situation in the Middle East goes deep, and I don't know that there's too much that we can do about it as a country except preserve gas, which requires less demand,” Graham said. “That's the only way to drive the prices down.”

In the meantime, however, prices continue to rise, although both Fleischli and Mosher said $5 a gallon would be a worst-case scenario.

“That's not anything we're even talking about,” Mosher said.

• Daily Herald staff writers Laura Stoecker, Mike Smith and Madhu Krishnamurthy contributed to this story.

Apps for cheaper gas

Smart phone apps like these can help you save a few bucks on fillups.

<b>Poynt</b> — Android, Blackberry and iPhone. Free. Best local gas prices.

<b>AAA TripTik</b> — iPhone. Free. AAA's trip planning app includes gas price search.

<b>GasBook </b>— iPhone. Free. Sort by brand, price, and distance, then map it.

<b>GasBuddy</b> — Android, Blackberry, iPhone. Free. Search user-submitted gas prices.