Will Gas Prices Cause Stamp Hike?
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The Postal Service reports that it operates “the largest civilian vehicle fleet in the world with more than 219,000 vehicles driving more than 1.2 billion miles each year and using nearly 121 million gallons of fuel.”
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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