Newspaper article Sarasota Herald Tribune

Precipitous Per-Gallon Price Drops Are Having a Welcome Ripple Effect

Newspaper article Sarasota Herald Tribune

Precipitous Per-Gallon Price Drops Are Having a Welcome Ripple Effect

Article excerpt

Precipitous per-gallon price drops are having a welcome ripple effect

Can a beer distributor have days of wine and roses?

Sarasota's Gold Coast Eagle Distributing seems to be in the thick of them.

The prices set by brewers were locked in for the winter and, just in time, seasonal visitors, part-timers, vacationers and snowbirds have arrived, boosting the volume of product that Gold Coast ships.

But perhaps best of all for this family-owned business, the cost to fill up its fleet of 80-plus vehicles with fuel has fallen -- a lot -- in the last six months.

"I am burning 200 and some odd thousands of gallons of fuel a year, just with my fleet," Gold Coast owner and president John Saputo said. "If I am saving, like I am right now, 20 cents a gallon, that is going to be substantial."

While oil producers from Texas to Saudi Arabia may be lamenting the precipitous drop in crude oil prices that has caused gasoline to take a similar tumble in the U.S., Southwest Florida businesses such as Gold Coast that rely on petroleum are rejoicing, after years of record prices at the pump that have cut into profit margins.

In this region and throughout much of the country, gasoline prices have fallen by roughly 70 cents per gallon since summer.

"In Texas, North Dakota, Western Pennsylvania, it may mean less drilling in those states," said Jay Bryson, global economist at Wells Fargo Economics Group. "But net-net, it is going to be a positive on the U.S. economy."

Those positives, Bryson contends, will ripple throughout the nation and help recession-weary consumers in particular.

"If you assume that prices are going to stay here for a year, what that would do is give the average household an extra $700 in purchasing power," Bryson said. "It's kind of like a tax cut, so it would tend to be stimulative of the economy."

The latest retail sales figures already suggest falling gas prices are having an impact on consumers, and generating increased spending.

"It looks like it's reflecting that windfall," said Sean Snaith, an economist at the University of Central Florida, in Orlando. "People are spending more on going out to eat."

Wide effects

Beyond consumers and delivery companies like Saputo's, a variety of businesses -- lawn care to pizza delivery -- are benefiting from the drop in gas prices.

"Any company that relies on transportation is going to benefit from those falling prices," Snaith said.

Palmetto-based Southern Auto Transport is another example.

While the cost to ship snowbirds' vehicles from traditional Southwest Florida feeder markets such as Michigan, Ohio and Pennsylvania has remained static for several months, the expense of filling Southern Auto's trailer trucks with diesel has sunk.

Consider, for instance, the price of the fuel at the Pilot station at U.S. 301 and Interstate 75, a typical source of diesel for Southern Auto's 10 trucks. …

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