Companies mull mileage-rate hikes
As gas prices continue to climb to record levels, some local businesses are looking at raising their mileage rates for employees. The price of 87-octane regular unleaded gasoline hit $3.79 at some Fargo pumps Wednesday.
As gas prices continue to climb to record levels, some local businesses are looking at raising their mileage rates for employees.
The price of 87-octane regular unleaded gasoline hit $3.79 at some Fargo pumps Wednesday. A spokesman for AAA said it is "very likely" Fargo-Moorhead area drivers will be paying $4 per gallon in the next several weeks.
"Our current average is about $3.71, and that's a record for Fargo, and I expect it to be higher tomorrow," Gene LaDoucer said.
At Flint Communications in Fargo, financial officer Karen Grindberg said the firm plans to raise its mileage rate next week. The cents-per-mile rate was increased into the 40s last year, and the new rate will be closer to the IRS optional standard mileage rate of 50.5 cents per mile, she said.
Flint employees are being encouraged to carpool, and the company is offering them the option of using rental cars instead of their own vehicles to help cut costs, she said.
"We actually have three of our employees who just bought mopeds," she said.
Enterprise Rent-A-Car in Fargo has enjoyed a jump in corporate business lately, though it's hard to tell how much of the increase stems from rising gas prices, said assistant manager Josh Guggenberger.
He said it's always been cheaper to use a rental car than to pay employees mileage.
"But the difference has been more significant now with the increase in gas," he said.
Many public entities, including the city of Fargo and North Dakota State University, follow the IRS optional standard mileage rate, which increased from 48.5 cents per mile in 2007 to 50.5 cents per mile this year.
Gio's Pizzeria in Moorhead is considering increasing the delivery fee that goes directly to pizza delivery drivers, but the decision is being delayed as the restaurant prepares to move to a new location by Moorhead High School, manager Becky Davis said.
About three years ago, the restaurant started tacking on a $1 fee per delivery to help offset drivers' fuel costs. The fee was bumped to $2 about 18 months ago as gas prices continued to soar past $3 per gallon, Davis said.
Unfortunately, some customers think the delivery fee covers the tip, which it doesn't, she said.
"It's kind of unfair to the drivers," she said.
LaDoucer said there's no relief on the horizon.
"It looks very likely that we will be paying $4 at the pump in the next several weeks, largely because of significant increases in the price of crude oil," he said.
The average price of a gallon of 87-octane regular unleaded in North Dakota was $3.76 on Wednesday, or about 5 cents below the national average, LaDoucer said.
The price of light, sweet crude oil closed at just more than $133 a barrel Wednesday, setting yet another record.
"So, unless there's a major correction in oil prices, we're going to see a sharp increase in gasoline prices," he said.
Readers can reach Forum reporter Mike Nowatzki at (701) 241-5528