Delivery alert

There may be an issue with the delivery of your newspaper. This alert will expire at NaN. Click here for more info.

Recover password

Falling fuel-price benefits vary

ALBUQUERQUE, N.M. — What impact have lower gas prices had on local businesses?

Albuquerque-based beer-and-beverage wholesaler Premier Distributing is saving around $43,000 a month on fuel for its delivery fleet compared to last summer. (Adolphe Pierre-Louis/Albuquerque Journal)

Albuquerque-based beer-and-beverage wholesaler Premier Distributing is saving around $43,000 a month on fuel for its delivery fleet compared to last summer. (Adolphe Pierre-Louis/Albuquerque Journal)

It depends on whom you ask.

For Premier Distributing, an Albuquerque-based beer wholesaler that has about 175 vehicles on the road around New Mexico daily, it’s meant significant savings. At current prices, Premier will spend about $43,000 less per month on fuel than it did last summer, according to Reggie Hardway, executive vice president and part owner. Slightly less than half of Premier’s fuel costs are for gasoline, while the rest goes to diesel. Diesel hasn’t fallen as precipitously, but Hardway says savings have added up.

“It definitely helps for sure. It helps the bottom line,” said Hardway, whose company distributes Anheuser-Busch beers and other drinks across 28 of New Mexico’s 33 counties.

It’s not a total boon, though. Hardway said most of the savings get applied to other expenses that are on the rise, like health insurance.

“You save in this pocket and pay out of the other pocket, but it’s better to save in at least one pocket, that’s for sure,” he said.

The lower prices aren’t quite cause for celebration at DMC Logistics – the state’s largest logistics company – just as exceedingly expensive fuel wouldn’t cause great alarm. The company, which uses a fleet of 64 vehicles to move everything from furniture to paperwork, factors a fuel surcharge into most of its customers’ bills, a standard industry practice. The surcharge fluctuates regularly to reflect current fuel prices, so it’s ultimately DMC’s customers benefitting today.

“We’re kind of on a really nice down cycle, which is great (for the customers), but I think everybody pretty much says the same thing, which is, ‘We know how this stuff works,'” said Dawn Bodenner, who handles marketing for the company. “When it goes up, it adjusts, and when it goes down, it adjusts. (But) I think for everybody, when there’s the cost savings, it does help.”

Consumers may be rejoicing at gas pumps these days, but what about the gas-station owners? They haven’t seen much benefit – at least not yet. Ruben Baca, who represents about 400 stations statewide as executive director of the New Mexico Petroleum Marketers Association, said members tell him they’ve only seen about a 1-3 percent uptick in sales volume during the recent price drop.

Then again, he notes, this is not “the driving time of year.” Should prices stay down through spring and summer, the station owners will likely experience greater sales increases.

At this point, Baca said, the primary perk of low gas prices is that it means much smaller upfront costs for station owners. They aren’t extending themselves as much when a load runs $11,000-$12,000 instead of $17,000-$22,000, he said.

Current gas prices certainly make it cheaper to deliver pizzas, although the pizzerias themselves may not directly reap those savings. Domino’s Team New Mexico – a franchisee with 37 Domino’s around New Mexico, including Albuquerque, and southern Colorado – employs drivers who buy their own gas.

But Lawrence Joy, who handles marketing for the franchise operation, does credit lower gas prices for spurring customers to eat out more often.

“The main impact (of) lower gas prices is clearly being seen in consumer spending through disposable income, and sales are very strong for Domino’s Team New Mexico, which also means we are hiring at all of our locations,” Joy said via email.

Albuquerque Journal and its reporters are committed to telling the stories of our community.

• Do you have a story about how coronavirus has affected you, your family or your business? Do you have a question you want someone to try to answer for you? What issues related to the topic would you like to see covered? Or do you have a bright spot you want to share in these troubling times?
   We want to hear from you. Please email or Contact the writer.