Rising gas prices could mean higher costs for local businesses

Increasing gas prices could hit consumers more than once — at the pump and again when paying for services that depend on fuel. (WOWT)

By Sydney Babb

OMAHA, Neb. (WOWT) - Increasing gas prices could hit consumers more than once — at the pump and again when paying for services that depend on fuel.

Owen Kobes, owner of Owen’s Mowing, said fuel is central to every part of his operation.

“Fuel goes into every — every machine that we have. We’ve got a bunch of trucks around, equipment, gas and diesel, mowers, small hand tools, everything takes gas,” Kobes said.

As gas prices rise, Kobes said the cost of running that equipment follows.

“Operating all of our equipment, that price goes up significantly as well,” he said.

Business owner weighs surcharge as prices climb

Kobes said the last significant impact he saw from gas prices on his business was in 2022.

“It was up to four or five bucks a gallon of gasoline. That was 4.5 or 5% of our revenue. The last couple of years we’ve been closer to two and a half,” Kobes said.

If prices continue to rise, Kobes said a fuel surcharge for customers may become unavoidable.

“We can absorb some of this, but at some point maybe if our fuel prices are doubled, which is possible, we’re definitely going to have to pass some costs back,” he said.

Kobes said his business plans to hold off as long as possible before passing costs to customers.

“For everybody at home, your fuel in your vehicles is going to go up, the food that you’re eating — it costs more to get to the grocery store and get it home. Everybody’s costs are going to go up so we’re going to wait as long as we can to pass that cost off,” Kobes said.

UNO economist points to Iran conflict as key factor

University of Nebraska Omaha Assistant Professor of Economics Dr. Jane Liu said the oil market is highly sensitive to global events, particularly the ongoing conflict in Iran, which she said threatens global energy supplies.

Liu said predicting how high prices could go — or how long they will remain elevated — is difficult.

“It depends on the intensity of the conflicts, or how long it will last. So the oil price market will react to it very fast,” Liu said.

Liu said consumers should take steps now to prepare for rapid market shifts.

“Watch your budget in transportation with gas, like unnecessary trips, you know the little things,” she said.

Liu also noted that crude oil prices can affect any product made with or packaged in plastic, which could have a smaller effect on grocery prices as well.