High Gas Prices Trickle Down

A customer pumps gas near a sign board showing credit and cash prices at a Union 76 station in Encinitas, Calif., Thursday, Aug. 11, 2005. Oil prices zoomed higher Wednesday, touching a new high of $65 a barrel, with buyers focused on refinery snags, shrinking U.S. inventories of gasoline and motorists' growing thirst for fuel despite record-high costs. (AP Photo/Denis Poroy)
AP
Skyrocketing crude oil prices are hitting Americans in the wallet in ways they might not imagine, increasing the price of everything from pizza delivery to patching a leaky roof.

Gasoline costs about $2.37 a gallon on average this week, reflecting global crude oil prices that are more than $65 a barrel. A year ago, oil cost $44 a barrel and gasoline $1.89 per gallon.

However, CBS News Correspondent Trish Regan reports that high gas costs have not stunted Americans' appetite for shopping. According to the latest numbers, America's shopping habits have grown more than 10 percent in the past year, the fastest growth in more than a decade.

As credit cards and home equity loans continue to give consumers easy credit, retailers are in for a very good year, with of without higher prices at the pump, Regan adds.

But gas prices will not decrease anytime soon. The Department of Energy warned Wednesday that gas prices could remain above $2 a gallon through much of next year.

Oil prices rose briefly to $66 a barrel on Thursday and settled at a new high amid strong demand and concerns about supplies. Light sweet crude for September delivery settled 90 cents higher at $65.80 a barrel, the highest level since trading began on the New York Mercantile Exchange in 1983.

"Americans are going to have to rethink this idea that somehow $1 gasoline or $1.50 gasoline is 'normal.' I think we're going to have to get used to higher prices," said Amy Myers Jaffe, associate director of Rice University's energy program, on CBS News' Up To The Minute.

"Americans have gotten by very lucky until now, and I think we can expect to pay more," Jaffe added, noting that countries like Japan and South Korea are paying $4 to $8 a gallon.

Many U.S. companies are passing on their rising fuel costs to their customers. Most large airlines charge per-ticket fuel surcharges of $20 to $87 for international travel, and many domestic fares have jumped more than $100.

Pizza makers are doing it, too. Major chains such as Domino's and Papa John's have added a $1 fuel surcharge in most major markets.

The delivery charge helps offset costs associated with increasing drivers per-run payment, labor costs and insurance, said Dana Harville, a Domino's spokeswoman in Ann Arbor, Mich.

Papa John's surcharge covers more than its drivers rising fuel costs.

"Our restaurants have felt the pressures on the food cost side due to the higher ingredient costs related to fuel," said Chris Sternberg, a spokesman for Papa John's International Inc. in Louisville, Ky.

Few businesses depend more on surcharges than package delivery companies such as Federal Express, which has seen higher costs for jet fuel for its planes and diesel fuel for its trucks.

FedEx revises its surcharge monthly. For August it stands at 12.5 percent for express shipments and 2.75 percent for its slower ground service.

Fuel surcharges were first imposed in 2001. While unpopular, they allow those who ship via FedEx to factor for fuel price volatility.