NORTH TEXAS (CBSDFW.COM) – Just in the last week, gas prices in North Texas jumped 12 cents. A gallon of regular unleaded now costs an average of $3.79. That’s a dollar more than this time last year, and it’s at the highest it’s been since August 2008.
But consumers and businesses aren’t feeling the impact at just the pump alone.
Randy Allen has driven a moving van for Armstrong Relocation of Carrollton for 20 years. He says, “I love it. I love helping people relocate.”
But Allen says the rising gas prices have forced some of his colleagues to ‘relocate’ to another profession.
Allen and the other drivers are independent contractors. So even though they get paid based on a percentage of each job, Allen says, “If fuel goes up like it’s been going, it means a lot less money I get to take home.”
As of late March, Allen says he’s spent $6,000 more on diesel so far this year, compared with this time last year. “It’s quite a bite”, he said.
So why do gas prices keep rising? Critics say it’s the Federal Reserve Bank’s own policies that have contributed to the rising prices at the pump.
The policy in question: the Central Bank’s decision to buy $600 billion in long-term treasuries or bonds to pump more money into the economy.
The goal is to lead businesses to hire more people, but critics say too much money in the economy, can cause inflation, and believe that’s why in part prices are higher at the pump.
Dallas Federal Reserve President and CEO Richard Fisher disagrees with that theory. He says while he opposed the fed’s current policy; it’s not to blame for rising fuel prices.
“I think it’s a demand-supply situation, and some of it is a supply issue,” said Fisher. “The economy is picking up so we have more of a demand.”
The American Petroleum Institute says gasoline supplies in the U.S. dropped last week by more than four and a half million barrels — the most in 12 years.
Mike Gonzales is the president of Armstrong Relocation, one of the nation’s largest such firms. He says since gas prices started rising early this year, his company lost up to 20-percent of their drivers.
“That’s a lot for us,” Gonzales said frustrated. “We depend on volume, and if we don’t have enough drivers, that’s tough.”
As a result of rising gas prices, Gonzales’ company is imposing a fuel surcharge on some accounts, and giving all of the money to their drivers. “We treat them like family because they’re important to us,” he said. “I hate to see those guys take a hit.”
Driver Randy Allen says the money helps some, but now he worries about how high gas prices will rise this summer during the peak moving season.