09/19/05 — High gas prices causing budget woes

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High gas prices causing budget woes

By Bonnie Edwards
Published in News on September 19, 2005 1:56 PM

High gas prices are hitting everybody, as counties, towns, schools and businesses stagger under prices that are still higher than projected in their budgets.

Mount Olive Town Manager Ray McDonald hinted about a possible tax increase recently, saying the town figured $2.35 a gallon for gas in the budget. The town has already spent half of the fiscal year's money allocated for gasoline, he said.

He said a lot of factors would play into the need for a tax increase. If Wal-Mart comes to town, there would not be a tax increase, and there would not be one if the wastewater treatment plant goes online by June. The town has been lucky, he said, adding that the county saved the town $200,000 a year by taking over the EMS and dispatching.

Duplin School Superinten-dent Tommy Benson had only five days worth of gas for the buses when a late shipment finally arrived on Sept. 5 at the school bus garage. He said school officials feel more comfortable that the gas won't run out now, but they are still worried about the price.

He said the schools can't cut back to a four-day work week, because state law requires public schools to provide 180 school days with 1,000 hours of school instruction.

"It's throwing everybody's budget into a tail spin," he said. "You can't reduce the number of days students are in school. You can't do a four-day work week unless you changed the law."

Power companies are facing higher costs of diesel fuel used to fire the generators, and Bob Kornegay at Tri-County Electric Membership Corporation said a consultant is doing a rate study.

"Our costs are higher now," he said.

Tri-County has the lowest rates around, he added. The company has decreased prices twice in the past 20 years, but because of that, the gas price increase is a concern.

"We're probably under more pressure to go up, although we work hard to keep them low," he said.

Kornegay said he expects recently hired consultants to finish a rate study soon, and before the cooperative makes any decisions, the results will be announced in a newsletter that goes to all 22,000 members.

And the higher gas prices are not just hitting homeowners.

Local gas supplier Judson Pope of Mount Olive said his company received a notice from Tarboro, another electric cooperative, that the utility will be adding a fuel surcharge on his company stores' utility bills.

Pope said motorists should continue to conserve.

"It's bad for me to say, because I want to sell all I can, but there's a balance. I don't want to try to sell more than I've got," Pope said.

He said E.J. Pope & Sons in Mount Olive has a four-day supply of inventory. When the gas sells like it did a couple days last week at 200 percent of the normal amount, everybody's inventory is depleted.

"If we had 15 days in the ground, you would not see it change that much on the street," he said. One cent a day isn't going to reflect at the gas pumps, he said. But if the price goes up a penny a day for a week, customers will see a five-cent increase at the end of the week.

Prices are ranging all over the board, he said. The normal range is six cents from the lowest gas price to the highest. Now, he said, the range has been 40 cents and 50 cents the last couple days.

Prices at many stations in the area dipped below $2.89 this weekend, with some prices as low as $2.79 by this morning.

"One day they're up, and one day they're down," Pope said. The New York Mercantile price is dropping a lot, he said, but the prices the wholesalers in Selma are charging him have not dropped much.

Pope said he still expects to see spot outages. They will be hit-and-miss because of the refinery situation, he added.

"You've got to put something into the pipeline," he said.

Four refineries are still severely damaged, and it will take several months for production to get back to normal. Pope said the four damaged refineries supply 17 percent of the southeast region's gas needs and 7 percent of its diesel needs.

"Supply will be tight for a long period, probably weeks on end in the Southeast," he said. "We're more affected than the West Coast."

Pope hauls gas, too, and he has numerous customers who have been out of gas three and four days this week. He said between Saturday and Tuesday, he had a bunch of customers who ran out of gas.

"At some time during the last week, I'd say we've had six outages," he said. The local customers who ran out at one time or other this week were D.M. Price, R&H Oil, Grantham Supply and even one of his own stores in Mount Olive was out a couple of days, he said.