Pain at the pump felt widely

Fuel prices are going up, up, up - and so is the sense of helplessness for those facing the escalating costs.

"We are victims of the international marketplace," said Dale Duff, owner of Rocky Mountains Transportation in Whitefish. "And we can do absolutely nothing about it, except concentrate on being as fuel-efficient as we can. But basically, we don't feel like we have any control here at all."

Rocky Mountains Transportation operates a fleet of 28 over-the-road motor coaches, tour buses, school buses and vans.

"People all around the U.S. recognize that fuel costs are now an issue and that they will make some impact on the traveler," Duff said. "But no one can predict how much that will be and that's the thing that really worries me."

Even the Energy Information Administration arm of the federal government has been consulting a cracked crystal ball. In an April 7 outlook paper, it said, "Gasoline prices in 2005 are projected to remain high, at an expected average of $2.28 per gallon for the April to September summer season."

One week later, however, the same group said that as of April 11, the average national retail price of a gallon had already reached $2.28. Diesel fuel was $2.31 per gallon.

It is a challenge to find a single sector of the economy that is not hit hard by rising fuel costs. If it's not a direct hit at the transportation end, it will be an indirect one in retail or service.

Tom Siderius is a lifelong wheat, hay and cattle farmer in Kalispell. He said his production costs are going up while the price of his grain must remain the same. Even with the availability of tax-free, red-dyed diesel fuel for use in his off-road farm vehicles, Siderius is paying more to run his farm equipment this year.

"It costs me $60 per tank more than it did last fall to fill up my tractor," Siderius said. "The price of red-dyed fuel ranges from $2.11 to $2.25 per gallon and so far there's no limit to how much we can buy. Now that's definitely a help. But it's not enough of a help."

To save fuel, Siderius is doing as much minimum tillage on his land as possible this year.

"With minimum, you seed right into the last year's stubble," he said. "For regular tillage, I would normally work it, put fertilizer on it, work it again and then seed it."

The down side to minimum tillage is that the farmer loses some crop yield. And, in yet another squeeze play, farmers are now facing skyrocketing fertilizer costs.

"When a barrel of oil goes up, fertilizer prices go up as well," Montana Farmers' Union president Brooks Dailey said. "Fertilizer is a byproduct of fuel and it comes from the same crude oil family as gasoline and diesel fuel. "

Local farmers also pay heavily these days to transport their products to market. Siderius must give Burlington Northern Santa Fe Railroad an energy surcharge of an extra $160 per railroad car. This is in addition to the regular shipping charge required to get his wheat to Portland.

Dailey said he believes that the farmer's hands are tied when it comes to getting a fair price. "Suppliers set their margins for profit and the farmer must meet these," he said. "No way we can pass those extended costs on to the consumer."

With gas prices reaching an all-time Montana average high of $2.279 last week, it is important to remember that the cause of the collective anguish is not the local gas station.

The major component of the price of fuel is the cost of crude oil, the basic building block of gasoline. These days, crude accounts for approximately 52 percent of the price of gas. Federal and state taxes are another 23 percent. There is a 16 percent charge for refining costs and profits and 9 percent for distribution and marketing.

In 2002, the average price for a barrel of crude was $24.09. Today's price is over $50. The demand for fuel rises about 5 percent every summer when Americans do their serious vacation driving and flying. The United States obtains the bulk of its crude oil from Canada, Saudi Arabia, Mexico and Venezuela.

"A lot of things happen to a barrel of crude oil between the time it is pumped out of the ground to the time it's dispersed into an automobile at a retail station," said Mike Robinson, longtime owner of three Flathead Valley Conoco stations. "The oil has to be transported to a refinery, the refinery has to make it into gas and then that gas has to be distributed to a regional distributor. In western Montana that last step happens in Missoula. After that, the gas is bought by a distributor and transported to the individual retailer.

"Every day I receive a fax that tells me what the current cost of fuel is out of Missoula. It's called the 'Missoula rack price.' If I have fuel delivered that day, that's how much it's going to cost me."

The rack price is set by the oil companies and is based on many factors, including the cost of crude, the efficiency of the refinery system and the overall world politics of the oil business.

"Whatever the cost is, it's what I have to pay," Robinson said. "Whatever the competitive street price, it's what I have to charge. I, personally, have no control over gas prices whatsoever."

Higher fuel prices affect the costs of everything that's shipped.

At Tidyman's in Kalispell, store manager Mindy Petrie said that the chain's major grocery supplier, Supervalu, has added a $25 surcharge for each delivery truck that makes a direct store delivery.

"They call it a 'surcharge,'" Petrie said, "but we all know it's really about gas."

According to Mike Davis, Tidyman's vice president of marketing, "The big picture is that product is being shipped all around the country - typically first from a manufacturer to a wholesaler and then into the retail store. So we know there have to be added costs for transportation throughout that entire system. Any item in our store can have base cost changes driven by freight, though we have not raised prices based on our $25 surcharge."

Duff is another businessman resisting passing along his increased costs. He said, however, that the margin of profit in the transportation business is so small that he is unable to wait very long to pass along increased fuel costs to his customers.

"We're going to have to raise our prices - fold that into our cost of doing businesses," he said. "I think that businesses are true victims of the economy."

"But we're planning on going full tilt this summer with every vehicle we've got. Modern motor coaches and school buses are efficient by their very nature. You put 30 to 40 people in a vehicle and it's just obviously more fuel efficient than a V-8 pickup."

On the Web

A Web site, www.montanagasprices.com, tracks gasoline prices around Montana.