Business: Singing the energy crisis blues

As the price of regular gas hits $4 per gallon this week, business owners all over the North Fork are staring head-on into an economic reality that promises to cut into their profits.

Keith and Brian Lewin

Keith and Brian Lewin own Lewin Medical Supply on Oliver Street, near Route 58 in Riverhead. They have three vans on the road eight hours a day delivering medical supplies to hospitals and medical offices.

“Everybody wants their products delivered, and there’s such a small markup that fuel prices are eating up the profit. There are some products that we don’t make money on already,” said Keith.

The brothers pay their gasoline bills with a corporate credit card. They were shocked to see the balance on the card hit $6,000 for gasoline this month.

Brian said he’d just filled up one of their diesel vans for $4.35 per gallon on Friday morning.

“No one’s reimbursing us on fuel, and our insurance reimbursements are down,” he said.

Harry Samon

Harry Samon, director of finance at Honda of Riverhead on Pulaski Street, said he can already see signs that what happened to his business when gas prices spiked in 2008 is happening again.

“It absolutely has affected us, but in a positive way,” he said, adding that the company is doing brisk business in motorcycles with smaller engine bores, under 750cc. He said those bikes get between 60 and 70 miles per gallon, while some of the smaller scooters that he’s begun to stock get as much as 100 miles per gallon.

“Where it hurts me is watercraft more than anything,” he said. In the summer, one third of the business usually comes from personal watercraft, and he expects that to go down this year.

Mr. Samon has decided to carry more scooters.

“Three to four years ago, I ordered heavy and I finally got rid of the inventory. Now I’m ordering heavy again,” he said.

Andrew Galasso

The sales manager of Larry’s Lighthouse Marina in Aquebogue, Andrew Galasso, said that this year’s high gas prices come just after the marina was required by the Suffolk County Health Department to rip out its old gas storage tanks and put in new, double-walled tanks at its fuel dock.

The marina will be paying for that upgrade for the next 20 years, he said. On top of that, boaters pay an extra 50 cents per gallon in taxes over the cost of the same fuel at gas stations. Mr. Galasso expects boaters to be visiting the gas dock less frequently this season.

“People make shorter trips when gas prices are high. Instead of Block Island, they’ll go to  Shelter Island,” he said.

Though he hasn’t yet seen many people trade in bigger boats for smaller boats or switch to sail power, he said, “We’ll see how long these gas prices last. That’s what happened in the late 1970s, with the oil embargo.”

Outside at the fuel dock, Joe Pernal of PJP Petroleum was filling the storage tanks. He said people were giving him a hard time about high prices everywhere he went.

“Everybody calls it liquid gold, but it doesn’t affect me,” he said. “My salary stays the same.”

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