With gas prices soaring to record levels, area companies that operate vehicle fleets are passing on their added costs to clients while also searching for more economical strategies of doing business.

By early May, prices in the Chicago area had risen above $3.78 per gallon. As a result, many businesses have had no other choice but to add a surcharge to their delivery or transportation services.

“Six months ago, we ended up adding a small gas surcharge, passing that along to our customers,” said Elana Margolis, manager of public relations for Peapod, an online grocery delivery service whose corporate office is located in Skokie.

“This week it’s averaging about $1,” she said. “That’s based on national gas prices, not even Illinois’, which we know are higher.”

Businesses and individual consumers alike are outraged by the recent price hikes, with many wondering how prices have reached their current level and whether or there will be any reprieve in the near future.

Industry experts say that the driving public must understand the four factors that contribute to the ever-fluctuating price of gasoline: crude oil costs, state and federal taxes, refinery costs and profit margins, as well as dealers’ costs and profit margins.

Crude oil prices account for about 50 percent of the cost of gasoline and are regulated by the Organization of Petroleum Exporting Countries (OPEC). OPEC is the single largest entity which can impact the world’s oil supplies through control of daily production. It is a consortium of 12 countries: Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

When OPEC wants to raise the price of crude oil, it simply reduces production. When oil production dips, gas companies get nervous and raise prices. Typically, a $1 increase in the cost of a barrel of crude oil results in an increase of about 2.5 cents per gallon of gasoline. Sometimes, the mere threat of oil reductions is enough to raise gas prices.

The Chicago area is one of the only areas in the nation that requires reformulated gasoline, which is more environmentally friendly.

“The result of this targeted approach to air quality has been to create gasoline market islands,” said John Cook, director of the petroleum division of the DOE’s Energy Information Administration, speaking before the U.S. House of Representatives Committee on Energy and Commerce in 2001.

Chicago is one of only three prominent gasoline market islands in the U.S. that are reliant on just a few refineries that can produce the specialized products. High demand, a supply problem at a refinery or a problem with a pipeline can cause prices to surge. As a result, the additional cost of producing reformulated gasoline is estimated at 2.5-4 cents per gallon.

Dealer markups commonly raise prices between 2-10 cents, depending on the retailer, yet it is state and federal taxes that compose the second largest portion of gas pricing. Currently, federal taxes on gasoline are 18 cents per gallon, while the Illinois state motor fuel tax is 19 cents per gallon. State sales taxes add between 6.25-9.25 percent to the cost, while local, county and miscellaneous taxes add 4-9 percent to that total.

This means that Illinois consumers pay in the range of 70 cents per gallon for state taxes. Add another 13 cents for those living in Chicago.

Those monies are allocated to the Illinois Motor Fuel Tax (MFT) Fund. About 20 percent of that fund goes toward immediate deductions, which include multiple transfer funds and administrative expenses. The rest is then split between the Illinois Department of Transportation, with 45.6 percent designated for road and state construction funds and 54.4 percent for local units of government.

In an attempt to relieve consumers of the burden on their budgets of the rising costs of gas, presumptive Republican Presidential nominee John McCain (R-Ariz) has proposed a holiday from the federal motor fuel tax that would last from Memorial Day to Labor Day, saving Americans more than $6 billion. Yet one of his opponents, Barack Obama (D-Ill), has called McCain’s tax relief a “gimmick.”

“We are arguing over a gimmick that would save you half a tank of gas over the course of the entire summer so that everyone in Washington can pat themselves on the back and say they did something,” said Obama recently.

Gimmick or not, Americans are looking for some type of relief from the overwhelming price hikes, which includes relying more on public transportation.

Amtrak is enjoying record passenger levels across the nation. Marc Magliari, an Amtrak spokesman speaking to KSDK News Channel 5 in St. Louis, said the company is even considering adding more cars to some of its routes because ridership is up so much. On some routes, ridership is up more than 90 percent, Magliari said.

Yet businesses whose main source of income is derived from deliveries, like Elk Grove Village-based Tasty Catering, a corporate catering service, have no choice but absorb the price hikes, or take innovative steps to economize without affecting customer service.

“I’m really proud to say that we did not have to raise prices,” said Jamie Pritscher, logistics manager for Tasty Catering.

Beyond sending out fewer trucks and reducing return trips for hot-food pick-up, Tasty Catering’s sales staff uses a geo-coding system to maximize delivery routes as well as utilizing an online information management service supplied by Maine-based Wright Express.

Wright Express provides vehicle fleets with detailed transaction data, analysis tools and purchase control capabilities by capturing transaction data at more than 180,000 vehicle maintenance locations in the U.S., including more than 90 percent of the nation’s retail fuel locations, using fleet and corporate charge cards.

The system requires each driver to insert the charge card into the gas pump, which records how often vehicles are filled up and how many miles per gallon each vehicle is using. It also provides comprehensive pricing information at each of its member retail fuel locations.

“It’s an awesome program,” said Pritscher. “We really can pick apart and look at fuel management. They do all of the reporting for you. I can just pull it up on the internet for any data range I want.”

For companies like Tasty Catering, dealing with gasoline prices has become a top priority and its effects have filtered into every aspect of the business, said Pritscher.

“The sales and operations are combined (in the fight),” she said. “The whole company is behind it and watching it.”