High fuel prices affecting Physical Plant’s electric bill

By Gus Bode

As summer rolls around, motorists can forget about seeing gasoline prices with one as the first digit. Along with sunshine, barbecue and exposed skin, higher temperatures mean higher prices at the pump.

In warmer weather, gas stations switch to a more expensive, environmentally friendly, summer-time blend because it does not cause as much smog, said Kim S. Harris, an associate professor of agribusiness economics and an expert on oil and gas pricing.

When children get out of school and the snow melts, families often hit the road for gasoline fueled, Chevy Chase-esque family vacations.


“The demand for gasoline is greater than the supply,” Harris said. “Prices adjust upward to ration the limited supply of gasoline we have.”

Any economist will tell you real price means the cost to a customer once inflation has been taken into consideration while nominal price means the amount of money a customer pays for a product.

“We still have a way to go to get to an inflation adjusted all time high,” Harris said.

As far as real prices go, Americans can start complaining about all time high gasoline costs when prices rise above $2.90, Harris said. Europeans have a lot more room to complain.

Gas stations in Europe, one of five metric system using continents, sell their gas by the liter, which is less than a gallon. A liter of gas in Europe costs between $3.50 and $5.50, Harris said.

Prices are higher this year due to a 2 percent increase in gas usage worldwide, Harris said.

“I do not think we’re at the point where people stop driving yet,” Harris said. “They’re still driving, filling up the tank and spending an extra five to six hundred dollars a year.”


The University needs gasoline to power lawn mowers, service vans, transit cars, fork lifts and leaf blowers, said Phil Gatton, the director of the Physical Plant. These machines use 150,000 to 175,000 gallons of gasoline a year, Gatton said.

“It has an affect on our budget, but it’s not as bad as our utility side,” Gatton said. “My big concern right now is electricity.

“Eventually, these gasoline prices will make their way into the utility costs that homeowners and universities pay.”

As the price of gasoline rises, so does that of natural gas, Harris said.

Because prices continue to climb, many long time users of natural gas are switching to coal, and the increased demand they are creating is raising electricity costs for coal users like SIUC, Gatton said.

The Physical Plant has a strained budget because of cuts in state funding, and a 10 percent increase in electricity costs would mean an extra $600,000 bill, Gatton said.

Labor cuts are the last resort, and the University is not yet close to that point, Gatton said.

Delivery drivers having to pay extra costs at the pump aren’t getting any sympathy from their managers. Joel Neubert, an assistant manager at Jimmy John’s Gourmet Sandwiches, said drivers are reimbursed for the money they spend at the pump.

“I make minimum wage,” Neubert said. “The driver makes minimum wage plus tips, plus a percentage. When gas prices really go up, I have more trouble driving back and forth to work.”

While delivery drivers may get back the money they pay at the pump, they could start feeling the affect of high gas prices in other ways, Harris said.

“If you’re having to pay an extra $500 to $600 dollars on gasoline, you may not go out to eat or you may go to the movie less,” Harris said.

Reporter Zack Quaintance can be reached at [email protected].