www.ctv.ca Canadian Press

Canadian drivers and businesses that guzzle lots of fuel are pumped with anger over gasoline prices that are spiking because of war fears and concerns about world oil supply.

Dane Baily, vice-president of the Canadian Petroleum Products Institute, said he's had a barrage of phone calls this week over pump prices that jumped at least six cents in some places. "A lot of people want to know when prices are going down," he said. "I do too."

Many of the calls are from Montreal where the country's most expensive gasoline was being pumped Friday at 88.9 cents a litre.

"It's too expensive. It's frightening," said Montreal motorist Pauline Paquette she while filling up her vehicle.

"It's had an effect on my business," Dennis Doehl, owner of Jay's Moving and Storage, said from Regina where gasoline was 81.9 cents a litre.

"When people move, they have to move. It's just sometimes they do it themselves if our prices get too high because of gasoline prices."

Energy experts are blaming geopolitical events: a looming war in Iraq, a national strike in Venezuela that has affected oil production and a 26-year low in U.S. oil inventories.

But the pump pain isn't over yet, according to Wilf Gobert, energy expert at Peters & Co. in Calgary. He predicts gasoline prices are likely to leap again if the United States actually attacks Iraq.

"An attack on Iraq will temporary further cause a price shock because everyone will be afraid of what the longer term implication is," he said.

There's also some doubt about whether Venezuela will be able to pump out as much oil as it previously has when the strike ends because pressure in oilwells there has dwindled, Gobert added.

The topic of rising gasoline prices was raised in the House of Commons on Friday, when Bloc MP Benoit Sauvageau asked Industry Minister Allan Rock if the federal government plans to do anything about the situation.

"The prices are influenced by a whole host of factors and it's a provincial jurisdiction," Rock answered.

Baily pointed out that provinces rarely get involved in gasoline prices, although the federal and provincial governments collect gas taxes.

Gas prices are driven by crude oil, an international commodity that rides on supply and demand.

Even though energy companies have been reporting spectacular fourth-quarter results, the bonanza isn't being reflected on the stock market.

"Investors are leery," Gobert said. "Oil and gas has a notoriety for its volatility."

Ever since oil hit a low of $10 US a barrel in February 1999, prices have increased for the most part - the longest period of sustained healthy prices since the early 1980s, Gobert pointed out.

Oil prices averaged $31 in 2000, $25 in 2001 and $26 last year. Since Dec. 23, oil prices have been above the $30-mark. Friday's price closed at $35.05 US per barrel, up 89 cents.

Although consumers aren't pleased about the recent price spike, the Alberta treasury gains $108 million over one year for every $1 increase in the price of a barrel of oil.

An increase of 10 cents in natural gas prices each year puts an additional $137 million in government coffers.

www.austin360.com By CHRISTOPHER TOOTHAKER Associated Press Writer

CARACAS, Venezuela (AP)--President Hugo Chavez warned nations endorsing early elections not to be misguided by opposition allegations that he is leading a dictatorial regime.

Chavez urged the so-called Group of Friends,'' a forum of six nations backing negotiations mediated by the Organization of American States, to understand the truth about Venezuela.''

In Venezuela, there is a legitimate government, a democratic government,'' Chavez said during a speech to foreign diplomats. It's necessary to recognize that reality.''

Opposition leaders claim Chavez, a former paratrooper who was elected in 1998 and re-elected in 2000, is riding roughshod over the nation's democratic institutions.

Meanwhile, a melee between opposition sympathizers and municipal police under the command of a ruling party mayor erupted outside a building in Caracas where a petition backing early elections is stored. No injuries were reported.

Dozens of opposition supporters pledged to secure the building through the night and accused police of attempting a raid.

``We are going to stay here all night to safeguard the signatures,'' said Geraldo Blyde, a member of the Justice First opposition party.

Although a two-month strike that failed to oust Chavez has ended in all sectors except the all-important oil industry, Venezuelans still must cope with gasoline shortages and an economy in shambles.

Despite increases in oil production and government expenditures of more than $500 million on fuel imports, motorists waited for hours to fill up their tanks at service stations.

The strike is over but we are still going through a critical moment,'' said Wilmer Acevedo, 30, a tow truck driver waiting at one gas station. If I don't get gasoline, I can't work.''

Some restaurants, stores and factories were having trouble opening because of the gasoline shortage, causing serious delays in deliveries of other goods.

The government has raised oil production to more than 1 million barrels compared to pre-strike levels of 3.2 million barrels per day. Still, refineries remain largely idle.

Energy and Mines Minister Rafael Ramirez said Venezuela would import 12 million barrels of gasoline this month to make up for shortages.

It will take a couple of months to bring refining capacity back up to a normal operating rate,'' said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York. Part of the problem is they have fired a lot of the key people that used to run these things. You can't replace these people that easily.''

Thousands of employees are still on strike at the state oil monopoly, Petroleos de Venezuela S.A. More than 9,000 of the company's 40,000 employees have been fired for joining the work stoppage.

The opposition is planning a march Saturday in support of the striking oil workers and those who have been fired. Protesters will gather at four PDVSA office buildings in Caracas and converge on the five-star hotel where peace talks sponsored by the Organization of American States are being held.

The fate of the fired workers is a sticking point in negotiations between the government and opposition. Chavez vowed Friday not to rescind the firings. ``Not even if I were crazy,'' he said.

Shortages could worsen as the government implements exchange controls to protect its foreign reserves and the bolivar, which lost a quarter of its value during the strike. Dollar requests could take as long as 45 days to process under the new rules, which could delay imports. Venezuela depends on imports for 60 percent of raw materials.

The government fixed the bolivar at 1,598 bolivars per dollar. The bolivar is trading at roughly 2,500 bolivars to the dollar on the black market.

www.signonsandiego.com By Frank Green UNION-TRIBUNE STAFF WRITER February 8, 2003

Gasoline prices in San Diego County and elsewhere in the United States are spurting like a new well, pumped up by refinery glitches, war talk against Iraq and production cutbacks in strike-torn Venezuela.

In the past two weeks, area motorists have seen the cost of a gallon of unleaded regular gas spike by 6 cents a gallon, to about $1.71, according to the Utility Consumers' Action Network's survey of 550 service stations.

That's 40 cents higher than the price of gasoline in San Diego County a year ago.

"Crude oil is now in the $32-to $33-a-barrel range, about $10 higher than this time last year," said Paul Langland, a spokesman at Arco parent BP.

Langland attributed the price surge for crude oil to production problems last week at a ChevronTexaco refinery in El Segundo and jitters about developments in Iraq and Venezuela.

Meanwhile, the Automobile Club of Southern California said yesterday that its survey of San Diego County stations indicated the average price of fuel has jumped to $1.74 a gallon. The club does not check prices at as many outlets as UCAN's survey.

"Gasoline markets have reflected war fears among traders, and that continues to send prices higher," auto club spokeswoman Carol Thorp said. "Gasoline refinery activity is down because of tight supplies of crude oil worldwide."

An outbreak of hostilities and the possible loss of Iraqi oil on world markets could cause further gasoline price spikes, Thorp said.

Already, there were indications yesterday that prices may have risen beyond the levels in the latest UCAN and auto club surveys.

Some Chevron and Unocal 76 stations in San Diego yesterday were charging $1.87 a gallon for regular, while some Arcos – usually the low-price brand in California – were selling fuel for $1.77.

Gas at membership warehouse Costco was going for $1.67.

Independent dealers, who typically help stabilize prices in the market with relatively low prices, complained yesterday that they are getting squeezed as surplus fuel supplies dwindle from the 10 corporate-owned refineries in the state.

Joe Balistrieri, owner of North Park Service Center, said his cost for a gallon of unleaded regular jumped from $1.04 on Jan. 28 to $1.16 yesterday.

He nevertheless is trying to hold his pump price at $1.69 a gallon to compete with surrounding corporate-owned stations.

"When taxes are figured in, I'm making only about 4 cents a gallon right now," Balistrieri said. "I've had to bite the bullet."

Oil industry executives yesterday said a gallon of gasoline – even at current prices – still costs consumers less than a gallon of bottled water. When inflation is factored in, gasoline costs about the same as it did 30 years ago.

However, San Diego County motorists continue to pay far-higher prices than their counterparts nationwide.

The U.S. Energy Department said this week that the average price of regular gas climbed by 5.4 cents in the last week, to $1.53 – 18 cents or so less than the average price here.

Oil companies have long contended that San Diegans pay more at the pump because of the relatively small number of local stations per capita and the high cost of doing business in the area, among other factors.

U.S. crude-oil prices will average $32.36 a barrel this year, up 24 percent from last year, as inventories stay below normal levels and the nation prepares for a possible military assault on Iraq, the Energy Department said yesterday.

The department raised its estimate for U.S. crude-oil prices by 5.8 percent from last month's forecast.

Venezuelan crude-oil production, which has been curbed by a strike, is estimated at about 1.4 million barrels a day in February, up from last month's forecast of 1 million barrels a day, the department said.

Venezuela was producing about 3 million barrels a day before the strike began Dec. 2.

The department said it will take several months for production to return to pre-strike levels.

Global spare capacity is estimated at about 2 million barrels a day as the Organization of Petroleum Exporting Countries ramps up production by 1.5 million barrels a day in March, as agreed at its meeting last month, the Energy Department said.

Oil inventory levels held by member countries of the Organization for Economic Cooperation and Development could reach five-year lows by spring, the department said.

www.seacoastonline.com By Associated Press

BOSTON - Massachusetts Sens. John Kerry and Edward Kennedy called on President Bush Friday to release oil from the Northeast Home Heating Oil Reserve, to cope with increasing oil prices in New England.

"We write today to urge immediate action in addressing the dramatic increase in oil prices currently plaguing New England," Kerry and Kennedy said in a letter to Bush, adding that wholesale oil prices in Massachusetts had increased by 35 percent from last year.

In the letter, the senators wrote about the ongoing winter storm and below-freezing temperatures for more than two weeks that have increased emergency assistance requests by 20 percent from last year.

Oil prices were rising because of the effects of a nationwide strike in oil-rich Venezuela, uncertainty about war in Iraq and increased demand in the winter, the senators said.

About 69 percent of the nation’s 7.7 million households using heating oil are in the Northeast, Kerry and Kennedy said. They also asked Bush to release $100 million in Low Income Home Energy Assistance Program funds, on top of the $200 million released two weeks ago.

"That’s exactly why we worked to create the reserve, to help New England families through times just like this," Kerry said.

"With oil prices climbing by 35 percent, an exceptional cold winter and a stumbling economy, Massachusetts’ families are facing an emergency," Kennedy said, adding that the oil release would be "crucial to the health and safety of these families."

www.newsok.com 2003-02-08 By Adam Wilmoth The Oklahoman

TULSA -- The credit rating of Tulsa- based Citgo Petroleum Corp. continued to tumble Friday as the oil strike in Venezuela continues after nearly 10 weeks.

Citgo, which is owned by Venezuela's national oil company and until December received more than half the oil for its three refineries from its parent company, took its second downgrade from Fitch Ratings this year. It is the company's fourth downgrade since the strike began Dec. 2. All three credit agencies have dropped Citgo's debt rating to junk status.

Fitch on Friday dropped the company's debt rating to B+ from BB- citing the volatile situation in Venezuela and the potential for Citgo to acquire more debt.

Citgo spokesman Kent Young declined to comment on the downgrades, but he said the company's three key refineries -- in Lake Charles, La., Corpus Christi, Texas, and Lemont, Ill. -- were running at full capacity.

In an SEC filing Friday, Citgo said the company continues "to be able to locate and purchase adequate crude oil, albeit at higher prices than under the contracts with (parent company) PDVSA, to maintain normal operations at our refineries and to meet our refined products commitments to our customers."

But in December 2002, Citgo received only 59 percent of the crude oil volumes it received from its parent company the previous December. Volumes improved to 94 percent in January, but are expected to fall to about 80 percent in February, according to the SEC filing.

The Tulsa company is having to make up for the lost crude by buying oil on the market, where crude oil traded above $35 on Friday.

"They're facing a triple whammy," said Bruce Bell, chairman of the Mid- Continent Oil and Gas Association's Oklahoma division. "Their supply is gone, they're having to buy oil and prices are higher than they have been in a significant amount of time."

And every time Citgo's credit is downgraded, it makes borrowing money to pay for that more expensive crude more costly.

"A downgrade always comes at the wrong time," Tulsa money manager Fred Russell said. "It comes at a time when a company with a lot of debt needs refinancing or more loans. Downgrades are painful confirmation of the nervous existence companies with much debt must face, and you can almost be assured that one downgrade, especially in bad economic times, leads to more downgrades."

Citgo's output represents about 5 percent of the nation's refining capacity. The company also has 13,400 gasoline retail outlets.

Opponents of Venezuelan president Hugo Chavez have staged a general strike for nearly 10 weeks in hopes of causing a nonbinding referendum on his rule. They say the twice-elected Chavez is authoritarian, while his supporters accuse strikers of plotting a coup.