Impact of opening US petroleum reserve is unclear as gas prices hammer couriers
INDIANAPOLIS (WISH) — A local courier service on Thursday said it has already lost drivers and customers thanks to rising gas prices.
Roscoe Express Delivery operations director Brent Griffin said delivery drivers are pushing his company to pay more to offset fuel prices. At the same time, delivery customers are threatening to end their relationship with his company if he doesn’t lower prices, a threat at least two of them have already made good on.
“It’s hard for us to pay our drivers and still make some type of money,” he said.
Griffin’s company delivers everything from consumer goods to legal documents and medical supplies all over the country, so drivers rack up miles quickly.
Griffin said his company can maintain its current delivery operations for about another six months. After that, he said he will have to either raise prices or lay off drivers.
Oil prices skyrocketed following Russia’s invasion of Ukraine on Feb. 24 and the Western countries’ subsequent decision to sanction Russia, which produces about 10% of the world’s oil. Crude oil rose from $91 a barrel on Feb. 25 to $115 a barrel a week later, and has remained above $100 per barrel almost every day since, closing at $107.82 on Thursday.
President Joe Biden on Thursday ordered the strategic petroleum reserve to release 1 million barrels of oil per day for the next six months, or 180 million barrels total. Biden pitched the move as a way to cut gas prices while production ramps up.
Dagney Faulk, a Ball State University economist, said, based on current consumption rates, the extra oil could cut the price you pay at the pump by 15 cents to 20 cents per gallon on average. Faulk said many other variables affect gas prices, including summer travel demand, refinery capacity, and supply chain shocks, any of which could offset whatever help comes from the national petroleum reserve release.
“The federal government has very little control over gas prices,” Faulk said. “I’m curious to actually see what the impact is.”