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Scioto Valley residents are wondering what a gallon of gasoline will cost when and if the United States goes to war with Iraq.

After all, it's more than $1.70 a gallon at Chillicothe-area stations this week, and we are in the dead of a cold winter where demand is far from peak. Prices jumped about 10 cents this week, following a similar boost the week before.

The experts tell us talk of war, terrorism, unrest in Venezuela, an unusually low supply of fuel and other complicated factors have pushed the price of oil on the world market.

These explanations has merit to a point, but we also note that energy giant BP this week posted an amazing 49 percent growth in profits for the final quarter of 2002. High oil prices were cited as one reason for BP's strong financial performance, which actually reversed a negative trend.

Although many residents (and more than a few Gazette readers have called us to complain about the rising prices) get angry with normal mid-week price fluctuations in our free-market economy, the recent trends warrant real concern.

The American Automobile Association, or AAA, has expressed concern about the recent gasoline hikes. While the group acknowledges the oil issues cited by the major gas suppliers, it added in a news release that "nothing fully justifies the dramatic increase experienced across the United States in the last month." The AAA spokesperson didn't come right out and use the phrase "price gouging," but the message was clear.

Our government should keep a close eye on the oil industry to make sure it does not exploit world tensions to boost bottom lines. Every penny or dime they charge takes money from people who might spend it elsewhere and help stimulate the economy.

Some states, including Ohio, are worried high energy prices will further drain state revenues and force higher taxes or more government cuts. Ohio's present budget crisis doesn't need any more bad news.

We urge both the federal and state governments to keep a close eye on gas prices and place appropriate pressures on the corporate giants that determine pump prices.

We also urge citizens to remain vigilant of examples of possible price gouging. If citizens believe it is occurring, contact both the attorney general's office and us.

Originally published Saturday, February 15, 2003

www.signonsandiego.com By Frank Green UNION-TRIBUNE STAFF WRITER February 15, 2003

Gasoline prices have surged at a record rate of 10 cents a gallon in San Diego County since Monday, sparking assertions by some industry observers that refiners are gouging motorists.

The average cost of a gallon of unleaded regular yesterday was $1.88 – 50 cents higher than at this time last year, according to a survey of 550 area stations by the Utility Consumer's Action Network.

Meanwhile, a survey by the Automobile Club of Southern California released yesterday indicated a slightly lower average in the county of $1.83.

The cost of fuel may be rising so fast that the surveys can't keep pace.

At a 76 station in Hillcrest yesterday, unleaded regular was going for $1.96, while a Chevron station in Mission Valley had the grade priced at $1.94.

Those prices are uncomfortably close to the record county high of $2.02 a gallon in May 2001.

"What can I do? I need gas to get to work," said June Enmark, who was filling up her van at a Mobil station in La Mesa yesterday afternoon.

Oil industry executives said yesterday that the high gas prices reflect steep increases in world crude-oil prices, which have jumped because of jitters about a possible war with Iraq, low oil production from strike-torn Venezuela and continued high fuel demand from U.S. consumers, among other factors.

"I can only say that gas prices are based on supply, demand and competition, and when you look at the marketplace you have to consider those three factors," said Nicole Hogson, a ChevronTexaco spokeswoman in San Francisco.

AAA spokesman Geoff Sundstrom said the price spikes of recent weeks aren't justified and are "uncomfortably close" to gouging.

Sundstrom made his remarks based on a national AAA survey showing the average fuel price across the country at $1.63 – 25 cents a gallon less than the San Diego price cited by UCAN.

Likewise, UCAN spokesman Charles Langley said the activist group is concerned that refiners might be taking advantage of world tensions to extract artificial profits.

"Is this real or is it opportunistic gouging?," asked Langley. "The only way to really know is after-the-fact forensic accounting."

UCAN estimates that for every penny jump in fuel prices, the average household pays an extra $10 or so for gas over a year if the increase is sustained.

"That is a lot of money taken out of the local economy," Langley said.

Oil-industry analysts said the pain at the pump isn't likely to end soon.

Fuel prices could rise by an additional 25 percent to over $40 a barrel before rich nations open the taps at their massive emergency stockpiles to cool the rally, the analysts said.

Prices already have jumped 45 percent in three months to the mid-$30s per barrel.

The West has so far balked at releasing stockpiled oil, confident that Saudi Arabia and others in the Organization of the Petroleum Exporting Countries are stepping in to cover shortfalls.

But analysts said a stockpile release may be needed to cap prices in the $40s in the event of war with Iraq, the world's eighth-largest oil exporter.

If the United States and Britain decide a military operation is necessary, the key question is whether there will be a simultaneous announcement that the U.S. Strategic Petroleum Reserve will be used, said Adam Sieminski of Deutsche Bank.

"I think it will, and this should prevent prices going much over $40," Sieminski said.

Reuters contributed to this report. Frank Green: (619) 293-1233; frank.green@uniontrib.com

www.nationnews.com Gas Hike - Saturday 15, February-2003

Gasolene goes up by eight cents per litre from $1.39 to $1.47, diesel by six cents per litre from $1.07 to $1.13 and kerosene by ten cents per litre from 63 cents to 73 cents, the Energy Division of the Ministry of Economic Development said yesterday in a Government Information Service release.

The Energy Division added the hike was a result of increases in the world market price of crude oil influenced mainly by events in the Middle East and the general strike in Venezuela.

“The price of crude oil has risen from US$27.57 per barrel to over US$30 per barrel since the last price adjustment of petroleum products on June 1, 2002.”

The release also noted that a contingency plan had been developed to ensure the security of supply of petroleum products to the country.

“The Barbados National Terminal Company Limited will be pre-ordering three to four months’ supply of products from Trinidad. A public awareness programme for conservation will shortly be developed in conjunction with industry organisations, and permission will be given to suppliers to access the open market for supplies in the event that there is no guarantee of supply.

“The [company] will also clean and convert a 10 000 barrel diesel tank to store gasolene and additional supplies of diesel and fuel will also be stored in the event that there is no guarantee of supply.”

The increase comes short of two months after Parliamentary Secretary in the Ministry of Economic Development, Senator Tyrone Barker, said Barbadians did not have to fear an increase in oil prices since he believed normalcy would return to Venezuela.

www.theunion.com February 15, 2003 Grace Karpa Take the golf clubs out of your trunk and put air in your tires to take the sting out of your next gas fill-up. That's the advice from AAA of Northern California's Sean Comey to improve gas mileage in the face of gas prices that he describes as rising "quickly and dramatically." A labor strike in Venezuela as well as speculation about a war with Iraq has driven up the price of a barrel of crude oil to more than $30 a barrel. A month ago a gallon of unleaded gasoline cost $1.66 on average in California; on Friday the cost was $1.84 a gallon. A year ago, the cost was $1.29. In a survey of nine gas stations in Nevada City and Grass Valley Friday, the average price was $1.81. Prices generally rise around March, when demand for fuel increases along with the high driving season, Sean Comey, spokesman for the AAA of Northern California. San Francisco heads the list as most the expensive place to buy gas in California. On Feb. 11, the average cost of a gallon of unleaded gas was $1.95, compared to $1.60 in Las Vegas on the same day. "Gas stations get a lot of the blame when gas prices go up five and ten cents a gallon, but there are a lot of taxes," Comey said. In fact, 30 percent of the $1.39-per-gallon cost of unleaded gas in December 2002 went for taxes, according to the Energy Information Administration in the Department of Energy. Forty-six percent of the $1.39-per-gallon cost of unleaded gas was for crude oil, 12 percent was for distribution and marketing, and 12 percent for refining, according to the DOE. Local service station managers shied away from answering questions about how they price gasoline at their stations and refer reporters to corporate headquarters. A manager of a local 76 station wrote out a phone number for a corporate office, where spokeswoman Julie Igo said, "We really defer to industry associations to speak on behalf of the industry." Juan Palomo, spokesman for the American Petroleum Institute, said his association "is not allowed to keep track of how all the organizations set prices for a gallon of gas." "It varies for the simple reason that each station is individually owned and, even though they have the same brand of gas, they are owned by different people who use different methods to decide how much to charge and to survive and to make a decent return on investment," Palomo said. Land prices vary so much from neighborhood to neighborhood, he noted. For instance, a gas station on San Francisco's Nob Hill would have higher prices than one in Gilroy. Comey urged drivers to shop aggressively and to remember that only about 10 percent of cars need premium gasoline. "It'll say in the owner's manual or on the fuel cap if your car needs premium," Comey said.

www.nationalpost.com Robert Remington, with files from Ian Bailey in Vancouver National Post Saturday, February 15, 2003

CALGARY - The cost of driving a vehicle at today's record-high fuel prices has jumped more than 25% in a year, with the price of gassing up some behemoth sport-utility vehicles now exceeding $100 a tank of gas.

The price of regular gasoline reached a record 80.7 cents a litre this week, according to M.J. Ervin & Associates, a Calgary-based energy consultancy. But that national average, which is compiled every Tuesday, does not include a Wednesday increase in Vancouver of four cents per litre at some stations, or recent increases in Calgary, which is generally the last city in the country to see price hikes.

Factoring in the B.C. and Calgary increases, the average price of a litre of regular gasoline in 15 major cities now stands at 82 cents.

Supply disruptions caused by civil unrest in Venezuela and looming war with Iraq have contributed to the record prices, analysts say.

Gasoline has not cost anywhere near this much since the previous record high of 80.4 cents in May, 2001. And it's running almost 41% higher than last year's low of 58.3 cents.

Michael Ervin, president of M.J. Ervin & Associates, said the worst is likely over, because Venezuelan supplies are returning to normal and OPEC is promising stable supplies in the event of an Iraq war.

That's little consolation, however, to drivers in British Columbia, who will face another increase of 3.5 cents per litre on March 1 as a result of a fuel tax announced this week by Gordon Campbell, the B.C. Premier.

The fuel tax is expected to bring in extra revenue of $200-million annually, which is needed to improve transportation services, Mr. Campbell said. Most of that will be spent to improve rural roads.

The fuel tax has B.C. motorists fuming at the pumps and on open line shows, but Mr. Campbell defended his actions.

"There are many choices that people can make around transportation," Mr. Campbell said. "They can choose to drive in very expensive and gas-consuming cars. They can choose to drive in smaller cars. They can choose to use public transit."

The 3.5-cent increase means Vancouver-area residents will pay the highest fuel taxes in Canada at 20.5 cents per litre, according to The Canadian Federation of Independent Business. The B.C. average will rise to 14.5 cents a litre. Albertans pay the lowest provincial fuel taxes in Canada at nine cents a litre, while Greater Montreal residents and Newfoundlanders pay more than 16 cents per litre in fuel taxes.

M.J. Ervin's current survey of regular unleaded gas prices as of Tuesday range from a low of 67.7 cents in Calgary to a high of 94.9 cents in Yellowknife. (Calgary prices today are actually about 78.9).

Toronto's price is listed as 81.9, Ottawa's 83.2, and 89.5 in St. John.

At 82 cents a litre for regular, it costs $102.50 to fill the 125-litre tank of a GMC Yukon and $136.12 to fill the 166-litre tank of a Ford Excursion. A Ford Expedition's 106-litre tank would cost $86.92 to fill. A full tank of gas for a Toyota Corolla is $41, while a BMW 320i will cost $51.66.

Using manufacturer's fuel economy ratings, it will cost $15.99 to drive 100 km in a Ford Expedition in city conditions, while the same trip in a Honda Civic will cost $6.15 at today's prices.

The Canadian Taxpayers Federation said in a statement it is "alarmed" at the impact of the Campbell government's tax hike, noting it has recently urged the B.C. government to cut the 1.25 cent per litre gas tax collected to subsidize B.C. ferries.

"Instead of hiking gas taxes, the B.C. Liberals should lock arms with other provincial governments to press Ottawa for a share of the federal government's gas tax revenues.

"Ottawa is a deadbeat tax collector that spends only a fraction -- 2.4% -- of its $5-billion in annual gas tax revenues on roads, 99% of which is spent east of the Ontario border," said Victor Vrsnik, the B.C. director for the federation, in a statement.

GETTING YOUR FILL COSTS MORE THAN LAST YEAR:

Cost to fill today at 15-city national average of 82 cents/litre:

SUV

GMC Yukon $102.50

Ford Expedition $86.92

MID-SIZE

BMW 320i $51.66

COMPACT

Toyota Corolla $41.00

Cost to fill at lowest national average price in 2002 (58.3 cents/litre):

SUV

GMC Yukon $72.88

Ford Expedition $61.80

MID-SIZE

BMW 320i $36.73

COMPACT

Toyota Corolla $29.15

Cost to drive 100 km at today's 15-city national average:

Expedition

City: $15.99

Hwy.: $10.82

BMW 320i

City: $7.38

Hwy.: $5.33

Corolla

City: $5.82

Hwy.: $4.35

bremington@nationalpost.com