Seen another way, when the cost of gas goes up 15 cents per gallon then USPS expenses increase by $18,150,000.

In the context of an entity that had revenues of nearly $75 billion in fiscal 2007, it might seem that $18 million or so is not a big deal. But the problem is that gas prices have not just risen by 15 centers per gallon.

According to the Energy Information Administration, gas today is priced at $3.663 per gallon. Two years ago the price was $2.966 per gallon. That’s a difference of $.697 per gallon. If you need to buy 121 million gallons your additional cost is almost $85 million.

The problem is that as bad as gas price increases have been in the past few years, they could get a lot worse. Think of $4 a gallon this summer — and $5, $6 or $7 in the next year or two. Now we’re talking about huge amounts of money for a delivery system which is dependent on gas, especially when you consider that the Postal Service says it had a $5.1 billion net loss in fiscal 2007.

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