Rising Fuel Costs Leave Them Running on Fumes

The gardener shells out $450 for fuel each month, which is $250 more than it was costing him last year to fill up his lawnmower, weed trimmer and 1989 Ford F-150 pickup truck.

"It's awful," Garcia said as he picked up huge palm fronds that had fallen on the forest green lawn at a Beverly Hills home. He asked his customers to give him an extra $25 a week. Two offered $10, the Inglewood resident said, and the rest declined to pay anything additional.

"You explain the gas is expensive, but they say they can't give you more money."

Higher energy costs are causing financial distress across the economy. But for the smallest businesses and independent contractors -- such as the people who mow lawns or deliver pizzas or travel across town to translate court proceedings -- the pain is particularly sharp because they have trouble demanding more to cover the bigger tab.

Pump prices remain in record territory even as the price of crude oil has slipped in the last two weeks. California's average for self-serve regular gasoline Friday reached a fresh high of $2.643 a gallon, up from $2.312 a month ago, according to an AAA survey. The national average Friday was $2.251 a gallon, 2.5 cents below Monday's record but 20 cents higher than a month ago.

Certainly, more expensive oil and gasoline have squeezed profits at many large corporations.

Automakers have warned about lower first-quarter earnings as interest in gas-guzzling sport utility vehicles has waned. Airlines and big delivery companies have raised fares or added fuel surcharges. Things made from oil, such as plastics, also have become more expensive; that was why El Segundo-based Mattel Inc. raised prices on some toys 2% to 4% in January.

But boosting prices often isn't possible for small businesses, which fear losing customers, or independent contractors, who often pay for fuel out of their own pockets. And with profit margins thinner, they look for ways to earn more or spend less. This kind of spending diet has been showing up in recent reports of softening retail spending and consumer confidence, economists have said, adding to the list of symptoms of slowing growth in the U.S. economy.

"[Small]-business owners, independent contractors and the self-employed are competing in a cutthroat business," said Michael Shaw, an assistant director of the California branch of the National Federation of Independent Business. "They don't have the ability to go in and demand certain conditions."