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The Honolulu Advertiser

Posted on: Tuesday, May 11, 2004

Businesses may ask for fuel surcharge

 • Hawai'i drivers careful with fuel

By Dan Nakaso
Advertiser Staff Writer

Jay Baliguat, of Duke's Limousine, Inc., says state regulations and tough competition mean he cannot increase his prices to make up for the increase in fuel prices. A fill-up costs him almost $50.

Rebecca Breyer • The Honolulu Advertiser

Hawai'i bus operators, limousine services, truckers and other ground transportation companies may ask the state Public Utilities Commission to allow them to tack on a fuel surcharge to make up for money lost to higher gasoline prices.

The Western Motor Tariff Bureau, the organization that files for rate changes for its motor carrier members, is sorting through a survey of 32 Hawai'i businesses to consider whether to seek a fuel surcharge. The bureau hopes to decide in the next two weeks.

"We're basically asking them what they were paying for fuel on Dec. 15 and what they're paying today," said Bob Lewis, the bureau's general manager. "If the fuel costs are substantially higher, then the (telephone) survey would go a long way toward a request for a fuel surcharge."

If the PUC should grant a surcharge, Lewis said, "it would only be applicable as long as fuel stayed at that price. If the fuel prices came down, then the surcharge would come down and ultimately disappear."

Customers would receive an invoice for services such as a limousine ride, which would include a separate item for the special fuel surcharge, Lewis said.

Yesterday, the average price of a gallon of regular gas reached $2.103 in Honolulu, making businesses that rely on fuel once again wince at another hit to their profit.

"There's no way we can pass it on," said Raquel Pacheco, office manager at Akana Trucking, Inc., which specializes in heavy equipment hauling. "There's really nothing we can do. We're kind of stuck there."

The PUC this month approved a 7 percent rate increase for heavy equipment haulers, Pacheco said, to cover rising medical, workers' compensation, fuel and other cost increases.

So when fuel prices rise, Pacheco said, "basically we just have to roll with the punches."

The city regulates taxi rates and taxi drivers — not the companies — pay their own fuel costs. Otherwise, the state PUC approves rates requested by the transportation industry for a wide variety of motor carriers.

Limousine driver Jay Baliguat often spends more than $45 to fill a single tank worth of premium gas. Lately the cost of a tank of gas has been closer to $50.

But companies such as Duke's Limousine, where Baliguat is both a driver and operations manager, say that competition and regulation mean they can't pass along rising gas prices to customers.

"We have to eat it," Baliguat said yesterday, as he waited to drive a wedding party in his stretch Lincoln Town Car.

Duke's Limousine uses only premium gasoline. But some of the company's limousines — such as stretch versions of Cadillac Escalades, Ford Excursions or Lincoln Navigators — average only eight miles per gallon on fuel tanks that hold 20 gallons.

As operations manager, Baliguat reminds drivers to shut down their limousines immediately and not let them idle unnecessarily — and to run errands on their own time.

"Every mile costs," Baliguat said. "We do talk about it and make the drivers aware of what they're doing."

Royal Hawaiian Movers installed its own fueling station four years ago to help control costs. It also uses a preventive maintenance program for its fleet of trucks on O'ahu, Maui and the Big Island.

Eric Zybura, Royal Hawaiian Movers' CEO, has found that properly tuned trucks with properly inflated tires can cut fuel expenses 4 percent to 6 percent.

"In the transportation business," Zybura said, "you're always watching your fuel consumption."

Added pressure comes from congestion and roadwork, especially in Waikiki, that forces Charley's Taxis to idle and waste fuel.

"The drivers are totally disgusted," said Dale Evans, Charley's Taxi's president and general manager. "They have to work longer hours to make up the difference."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.