People across the United States are feeling pain at the pump lately, with the cost of gas surpassing the 2008 record and surging to all-time highs.

Although gas prices vary by state, it’s common for many areas to see the cost of gas rise above $4 a gallon.

These rising gas prices are taking a toll not just on individuals’ wallets, either.

Small businesses in various industries, many of which are just starting to rebound from the COVID-19 pandemic, also feel the impact.

Why are fuel prices so high?

The surge in gasoline prices is thanks, in large part, to the jump in oil prices. Russia’s invasion of Ukraine is the latest catalyst to push crude higher, but prices were already on the move ahead of the war.

Even before Covid, energy producers cut back on investment and less profitable projects under pressure from low prices and institutional shareholders demanding higher returns.

Supply and Overhead Costs

• Prolonged periods of spiking fuel prices raise the everyday costs of doing business, especially if a company has vendors and suppliers that must regularly transport goods or deliver services crucial to daily operations.

• For example, in a 2012 testimony before a congressional committee, a Pennsylvania horse farm operator pointed to severe impacts from rising costs for the farm’s hay and feed suppliers.

• Transportation costs limit her farm’s ability to travel to showcase and breed horses, cutting into income opportunities.

Some businesses have been able to cut back fuel consumption significantly by simply reducing their service area; although, for some, this may not work as reducing the distance they travel will, in the short term, reduce their number of customers.

AI technology is also helping fleet managers to improve the efficiency of their fleet. By installing dash cams in their vehicles, they obtain more visibility and control over the way their drivers drive with the added bonus of improving safety.

Impact of fuel price increases on delivery and transportation businesses.

Needless to say, businesses that are focused — or highly reliant — on delivery and transportation are most heavily impacted by the increasing price of gas.

This includes everything from Uber drivers to services that transport patients so they can get to medical appointments to contracting and construction companies.

They have a few options for dealing with today’s fuel costs:

• Raising prices, which price-conscious consumers have little tolerance for

• Reducing the area they service so they can become more efficient in their use of fuel

• Altering routes or changing their driving practices. 

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