Taxi companies also feeling the pinch
May 01, 2008 - 09:34 AM
By Jeanne Beneteau
NORTHUMBERLAND - Record-breaking crude oil prices and escalating prices at the pump are good news for petroleum industry giants but bad news for farmers, said the Northumberland Federation of Agriculture (NFA) president.
Like the general public, farmers are feeling a financial pinch every time they fill their gas tanks for the family car or farm machinery, said NFA President Lyle Gallagher. Compared to this time last year, when gas prices averaged $1.04 per litre, the jump to more than $1.20 is considerable and adds to the cost of production, he said.
However, the high price of crude oil - nearly double from last year - has had the greatest financial impact on farmers, he explained.
"The price of nitrogen-based fertilizers produced from petroleum is double what it was a year ago," said Mr. Gallagher. "The price of oil, plus increased world-wide demand, has created a shortage and a sharp rise in prices."
Unfortunately, farmers cannot tack this dramatic cost-of-production increase onto the prices of their products.
"We have to take what the market will give us, which often does not reflect the true cost of production," he added.
Other businesses whose bottom lines are impacted by the price of gas, such as taxi companies, are also feeling the pinch, said Andy Dean, owner of Port Hope/Cobourg Taxi.
The combination of local gas prices hovering around $1.25 per litre, annual licencing fee hikes and the recent rise in minimum wage (while fares remain unchanged) have taken a huge bite out of the bottom line, said Mr. Dean.
"No one (the public) would blame us if fares had to go up to cover the price of gas but there is only so much you can charge," he said. "People need to watch out for their own pocketbooks and if the price is too high, they will take the bus."
There's nothing businesses can do to affect gas prices except wait and hope the prices go down, he concluded.
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