The House Small Business Committee, led by Chairman Sam Graves (R-MO), today held a hearing to examine the relationship between high fuel costs and small businesses. Persistently high gasoline prices and the volatility of the oil market are draining family budgets and putting increased stress on small businesses. According to a recent survey by the Small Business and Entrepreneurship Council, 72 percent of small businesses report they are affected by high energy prices. Of these businesses, 41 percent report that they have altered hiring plans and another 22% report reducing employee hours because of high energy costs.
“Small businesses are the historic source of new job creation in the economy, but are currently facing many challenges, including the burden of high fuel prices,” said Chairman Graves. “While it is good to see the price of gasoline falling in recent weeks, $3.75 per gallon gas is nothing to celebrate, especially considering it was under $2 per gallon a few years ago. Oil is a volatile commodity and gas prices will go back up, it’s just a matter of time. It is important to have hearings like this to discuss the need to increase domestic supplies before we are facing $4 gallon gas again. Small businesses need certainty to run their businesses, hire more employees, and plan for the future, and they can’t do that if they are consistently subject to the volatile global oil market.”
For related hearing documents, click here.
Notable Witness Quotes:
Ms. C. Cookie Driscoll, Owner of C. Cookie Driscoll, Inc., in Fairfield, PA said, “…we believe that any energy or environmental policy should have five primary objectives: ensure clean air and water; promote adequate and affordable energy; end U.S. reliance on foreign energy; simplify regulatory requirements and accelerate the approval process; and support federal energy research dollars for small firms. I beg of you to please keep in mind that the impact of rising and volatile gas prices is not isolated to a horse farm. Cattle farms, pig farms, and even poultry operations are dramatically affected by the price of fuel just like I am. These costs go so far beyond the cost of transporting the livestock.”
Robert McNally, President of the Rapidan Group, LLC in Bethesda, MD said, “Small businesses are the powerhouse of the US economy. Rising oil prices hurt them directly by increasing input costs, such as fuel, and reducing the purchasing power of their customers. And higher fuel prices feed into higher prices of many goods and services, including food and materials. These wholesale cost increases get passed along to small businesses, who must then contend with difficult choices as to whether to absorb or pass them along.
“It would be easier for small businesses to adapt to higher oil prices if they were stable. Gyrating oil prices are even worse because they increase uncertainty about future fuel costs and sales prospects, which can delay decisions on hiring and expansion. The main challenge facing small businesses and the US economy is not high oil prices, but gyrating ones.”
Jamie Smith, Franchisee, Mr. Rooter Plumbing in Baltimore, MD, said “My current fleet of five service vehicles uses a combined total of 1,200 gallons of gasoline per month, which equates to approximately 10% of my revenue. To alleviate this burden on my business and all small businesses, I ask that American policymakers immediately invest our tax dollars in strategies for increased energy production, conservation of our existing resources and promoting alternative energy options like natural gas and hybrid electric vehicles.”