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FIRST ON FOX: The pressure that the coronavirus pandemic put on small business, coupled with the historic inflation and spiking gas prices as the Russia-Ukraine war wages and relative inaction by the Biden administration, is creating a rapidly deteriorating situation for small business owners and operators.
Gas prices have reached historic levels amid soaring inflation in the wake of the pandemic and Russia’s war on Ukraine. In an effort to combat soaring gas prices, the Biden administration has already released tens of millions of barrels of oil from the Strategic Petroleum Reserve, but it has not been enough to have an impact. Meanwhile, the administration’s ban on Russian energy imports further tightened supply.
Some of the hardest hit have been small business across the U.S., who told Fox News Digital that they are struggling to keep their doors open and are demanding the Biden administration take immediate action to help them.
Ed Burns, vice president of relationships for Burns Logistics in Shoemakersville, Pennsylvania, told Fox News Digital that Biden’s energy policy is “shortsighted,” and compared it to “taking a baseball bat” and smacking it into the backbone of America’s economy.
“Gas price increases, and particularly diesel fuel costs, are going to hit the average American HARD as the cost of fuel in trucking is typically a pass-through cost to the customer,” Burns said. “The shortsighted energy policy of importing our fuel is quickly turning into a disaster for companies and consumers alike. We need to use our natural resources to remain energy independent as a nation. Seventy percent of goods in America are moved by trucks; trucking is the backbone of our economy, and our government’s energy policy is taking a baseball bat and smacking it into that backbone.”
“The shortsighted energy policy of importing our fuel is quickly turning into a disaster for companies and consumers alike.”
Adam Rizzieri, co-founder and chief marketing officer of Agency Partner Interactive in Dallas, blasted Biden’s “Green New Deal initiatives” that he says are “completely out of touch with reality.”
‘Completely out of touch’
“Small businesses like mine went from being kicked in the teeth by COVID mandates, to held down by the supply chain and job market crisis, and now we’re being lectured by progressive elites that say we should be happy to pay $15 a gallon,” Rizzieri said. “The average cost of an electric vehicle is over $56,000, which is $30,000 more than your average compact car. The Biden administration and these Green New Deal initiatives are completely out of touch with reality. As we see one avoidable crisis evolve into another, as business leaders, we ask ourselves: ‘When does all of this end?’”
Michael Garabedian, owner of Garabedian Properties Custom Home Builder in Southlake, Texas, says the Biden administration should return the country to being energy independent, and should “incentivize” domestic production of oil and gas.
“Energy costs are a hidden tax on our workforce, which are struggling to fill their tanks to get to job sites,” Garabedian said. “I personally [am] flummoxed on how just 18 months ago we were energy independent but are no longer. Domestic oil production is down by about 1.5 million barrels a day and this reduction predates the current European War.”
“Energy costs are a hidden tax on our workforce.”
“I would hope our [country’s] leadership would reevaluate our current circumstances and realize that runaway energy costs, just like inflation, are a tax on the American people and hit those of modest means the hardest. Increasing domestic production and incentivizing new refineries and liquid natural gas facilities will lower energy costs for everyone.”
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Help at the pump
Rick Bailey, partner of Bailey Materials in Cleburne, Texas, is pleading for more assistance from the Biden administration to help truckers at the pump.
“Politics aside, the American people are struggling at the pump, yes, but the reality is — all goods, no matter what they are — get to market in some sort of truck,” Bailey said. “We have a shortage of trucks moving goods and also a national shortage of truck drivers. Any assistance the government can provide to help the truckers at the pump would be very effective in keeping commerce moving. We must find a way before the trucking industry comes to a halt, grocery shelves are empty and a far greater cry comes from the people than what the pandemic ever posed.”
“We are at risk of losing our business due to the skyrocketing gas prices,” wrote Yorba Linda, California, Monarch 9 Café owners Thomas and Aileen Huynh in a letter Friday to the staff of Rep. Young Kim, R-Calif., and shared with Fox News Digital.
“As a restaurant business, we have very tight revenue margins. A small change in prices from our [distributors], gas costs and labor costs can really hurt us. The Biden administration should look to any and all solutions to make gas prices more affordable for everyone. They need to enact a plan to reduce inflation and increasing costs for small businesses.”
“The Biden administration should look to any and all solutions to make gas prices more affordable for everyone.”
Eileen Tynzar, president and owner fo TEACH Consulting Services, Inc. in Sayville, New York, said the way to solve the problem would be for the Biden administration to turn to domestic production of oil.
“It’s a trickledown effect! We need to solve this problem by reopening and producing oil domestically and they need to do so immediately!” Tynzar said. “Restrictions and bans that are crippling this country with inflation need to be lifted by our Administration now! We need to resume the pipeline projects that we started, such as the Keystone XL Pipelines. We need to open up our federal lands to oil and natural gas expansion! We need to stop this inflation in its tracks now!”
When the spike began
The spike in energy costs isn’t limited to the ongoing Russia-Ukraine war, say many small business owners and operators, who point to an increase beginning in January 2021 – around the time Biden took office. As a result, it’s making it difficult for companies to adjust salaries for their employees in order to respond to the higher price of gas.
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Rizzieri of Agency Partner Interactive said the increase in gas prices puts a “strong burden” on his employees and customers.
“Increased energy and gas prices are an increasingly strong burden to our employees, customers, and business partners alike. Crude oil is an economic input for almost every single industry so when the price of it spikes, so does inflation. Today, our employees need more money to commute to and from work. This isn’t just about Ukraine, this has been a growing issue since January 2021. … It’s a squeeze that gets tighter by the week.”
“This isn’t just about Ukraine, this has been a growing issue since January 2021. … It’s a squeeze that gets tighter by the week.”
Sue Schulz, owner of What’s Poppin Texas in Bedford, said the pandemic had already increased the costs of goods, but now with spiking energy prices, she may be forced to shut her doors.
“Cost of goods for a small business has gone up more than 30% during the Covid Crisis. Now the cost of goods will take another hit. This could lead to me working more and cutting payroll. I believe it could affect some of us staying in business or closing our doors.”
Mark Chapman, president and CEO of Chapman 3C Cattle Company in Hico, Texas, said “several variables” of his company were being impacted by higher prices, which he claimed may lead to the “death” of small businesses.
“We are not only a small business, but we are also in the agricultural industry, which means we have several variables going into our business,” Chapman said. “The price to haul our animals to the processor and the price of feed for our animals has increased, which then causes our customers to pay a higher price and we begin to make less of a profit. We see smaller revenue and return on our products when the prices of gas increase, and it may be the death of small businesses, ranchers, and farmers as we know it.”
“We see smaller revenue and return on our products when the prices of gas increase, and it may be the death of small businesses, ranchers, and farmers as we know it.”
Matthew M., owner of a moving company in Missouri, said that the profitability of his business has diminished, and he cannot afford to raise employee’s salaries for cost of living adjustments due to inflation.
“Despite the rise in what is charged to consumers, the profitability of the business has decreased. Any increased pricing is eaten up by inflation due to increased shipping costs and increased employee pay,” he said. “In the past, I have been able to keep my employee’s pay at a rate where they have a comfortable living, but now it is growing increasingly difficult to find customers who are willing to bear the increased costs of services. If gas and diesel prices continue to rise, I will be forced to decide whether to increase costs of my services, thereby limiting my services to only serve the wealthy or not be able [to] offer cost of living raises to my employees, which they rightfully deserve given the situation this administration has force upon the middle class.”
Situation getting worse?
Many small business leaders are worried that the situation will only worsen.
Gary Teich, owner of Lee’s Auto Body in East Islip, New York, told Fox News Digital that people are putting off repairs due to inflation, which is negatively impacting his business.
“We have oil heat at our shop. Every time we open a garage door, we are letting out all the warm air,” he said. “We operate on a small profit margin, and when oil prices are low, it is still expensive to keep the shop at a comfortable temperature. When the price of gas goes up, people drive less, so there is less potential work for us. When people are affected by the higher costs, they will put off repairs. This is like a perfect storm of the economy.“
Jacob Voge, president of Jefferson City Coca-Cola Bottling Co., in Missouri, said the ongoing rise in fuel prices is “stressful and worrisome.”
“It’s one thing to have fluctuating fuel costs, that is nothing new and the market reacts accordingly, but to have such a spike in fuel prices on top of an already inflated economy is extremely stressful and worrisome,” he told Fox News Digital.
Joe Scheppers, chairman of NH Scheppers Distributing Co. in Jefferson City, Missouri, tells Fox News Digital that he fears the recent spike in gas prices will get worse.
“Our fuel cost is up approximately 45% for the first two months of 2022, and given the recent spike in prices, I fear that trend will only get worse. Frequently, companies with sales and delivery fleets will institute fuel surcharges, but so far, we’ve always absorbed those increased costs rather than passing them along to our customers.”
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He said he’s working to keep costs down by exploring ways to visit small-volume accounts less often and by potentially introducing delivery minimums.
“As a company, Scheppers Distributing has historically preferred to compensate by looking for operational efficiencies such as visiting small-volume accounts less often, or possibly introducing delivery minimums to help cut down on trip frequency. I hope that our customers appreciate those efforts to preserve their margins and recognize that they can be a win-win for BOTH of us to help keep costs down.”
FOX Business’ Breck Dumas contributed to this report.