www.zwire.com SHAWN CLUBB, The Telegraph March 14, 2003

The Telegraph/JIM BOWLING Jeff Senger of Senger Gas prepares to detach a hose after filling a tank with propane gas in rural Jersey County. Propane gas has skyrocketed in cost in recent months, with the increases blamed on a severe winter across much of Propane customers might have noticed a sharp increase in prices lately, which industry insiders attribute to multiple factors, including the probable war with Iraq and a long, cold winter. Barb Bollinger of Senger Gas in Grafton said the cost for her company to buy propane from a distributor had risen 48 cents per gallon in one week. "It’s hard to pass this on," she said. "Everything has totally been going up, up, up." Bollinger said a minimum delivery could be 300 gallons, which would cost the residential customer an extra $150 with the increase in price. "It’s hard to stomach and pass on when you’ve got people out there, elderly people, that are trying to make it," she said. Melissa Erker, a spokeswoman for ConocoPhillips, a producer of propane, said the company does not comment about pricing issues because of the multiple factors that come into play. Phil Squair, vice president of regulatory and technical services for the National Propane Gas Association, said the price increase is tied to the long, cold winter, the threat of war in the Middle East and workers’ strife in Venezuela. "Propane is produced from crude oil and/or natural gas," he said. "When you’re refining crude oil, propane is the first thing to come up. When cracking natural gas, propane is the first (product). As prices of crude oil and natural gas change, propane prices track that change." Squair said the prices have not been affected in the exact same way in every region of the countrybut that they haven’t been much different. "It’s been a pretty bad winter across the country," he said. "When you have a higher demand and you have a long, cold winter, and you have troubles overseas, all the winter heating fuels are seeing the same things as to price increases." Squair said the prices could drop a bit once the demand eases off. "I know the weather services are reporting average sustained temperature rises," he said. "A decline in use would, I think, cause prices to ease off. The price of propane is not a regulated thing. To the extent demand starts to dwindle, we’re going to see prices dropping. "I’m sure individual propane marketers are conscious of the prices they have to pass on to their customers," Squair said. "No one wants to keep going back to their customers with price increases." shawn_clubb@hotmail.com

www.nationalpost.com Sherry Cooper Financial Post Friday, March 14, 2003

Does anyone really believe that the weapons inspections in Iraq are working and that the United States has already won, as Mr. Chrétien suggested last weekend? While we can reasonably debate the necessity of going to war, it is difficult to argue that Iraq is in compliance with Resolution 1441, requiring full and unconditional disarmament. The United States and the U.K. cannot indefinitely keep a 200,000-plus armed force on the doorstep of Iraq. And without that force, the weapons inspectors would be rendered impotent. As the diplomatic dance continues, the global economy has already paid an enormous price, and that price is now rising rapidly.

For more than a decade, the United States has provided the growth engine for the rest of the world. That engine is now clearly sputtering. While the American economy appeared to be reviving last summer, the resuscitation was cut short by the surge in energy prices and the shocks to business and consumer confidence. The rise in energy prices -- oil, natural gas, heating oil and gasoline -- has imposed a heavy tax on both households and businesses. Those who have recently paid a heating bill or filled up a gas tank know that discretionary income is down sharply. More than the fear of Middle East oil disruption has contributed to the surge in prices. It has been exacerbated by the unusually frigid winter weather. A strike in Venezuela, the fifth largest exporter of oil, has hobbled output. Refiners in the United States, the largest consuming nation, have whittled inventories to record lows in an effort to cut costs, and the shutdown of nuclear power plants in Japan has triggered large imports of extra oil for electricity there. Compound this with reduced conservation efforts, as Americans and Canadians have fallen in love with gas-guzzling SUVs, and you see why oil prices have risen so sharply and are unlikely to fall to the low-$20s even after the war.

The household sector is not the only casualty in the energy-price surge. The airline industry, already on its last legs, is further battered by the rise in costs. Many, including Air Canada, Northwest, United, US Airways, Air France and Lufthansa, are adding fuel surcharges to airfares, further eroding consumer purchasing power. The automobile industry, long a stalwart for the recovering economy in the United States and the booming economy in Canada, attributes much of its recent U.S. sales decline to consumer worries about war and higher gasoline prices. Production cuts in that sector are now threatening the strength of Ontario's economy.

And sentiment shocks are also doing meaningful damage. U.S. consumer and business confidence have been falling for months, and the latest survey data, released this week, suggest that Canadians are also feeling less optimistic about their economic futures -- not surprising, given the geopolitical purgatory we are enduring. The "CNN effect" has already set in. Consumers are glued to their TV sets and Internet screens, rather than out shopping, eating, drinking and cavorting. Businesses have postponed investment and hiring decisions, especially in the United States, and many remain fearful of terrorist reprisals as the United States appears to be increasingly isolated and mistrusted.

The U.S. economy deteriorated sharply in February, capped by the ghastly employment report. While the Canadian economy created more than 55,000 jobs last month, the United States lost 308,000. The February plunge in the U.S. employment figures might have been exaggerated by the January bounce, the call-up of military reserves and the East Coast blizzard, but these factors cannot fully explain the extraordinary weakness. It reflects employers that continue to retrench across the board. And the further elevation in the weekly unemployment insurance claims in the United States suggests scant improvement in March.

As a result, stocks have sold off sharply and interest rates have fallen as the safe-haven flight to government bonds continues. U.S. two-year yields have fallen below 1.4%, their lowest level in history. Ten-year Treasury yields touched 3.5% this week, their lowest reading since 1958. Some have speculated that the Federal Reserve will cut the overnight rate from an already depressed level of 1.25% when it meets next Tuesday. In my mind, this is unlikely in that it would do more to arouse concern than to assuage it, especially in the midst of the Security Council countdown. More likely, the Fed will shift its assessment of the economic outlook from neutrality to weakness, preparing us for a rate cut this spring. But we have already seen 12 rate cuts and U.S. mortgage rates are at record lows. It's hard to imagine that the Fed's actions this time would turn the tide.

Instead, what is needed now is a resolution of the Iraqi situation. It appears, in my mind, that barring a miraculous exit of Saddam Hussein, the cost to global security of not going to war may at this point be greater than the cost of doing so. After all the sabre rattling, the United States and Britain cannot blink now without emboldening not only Saddam Hussein, but also Kim Jong-il, the leaders of Iran, and any other dictators. Unfortunately, it appears that the turbulence in the post-Sept. 11 world is far more costly for the United States than anything we saw during the Cold War. The expenses and dangers of being the world's only superpower will continue to be far greater than imagined. A world so dependent on the strength of U.S. demand for imported products will be badly shaken by weakened American purchasing power. The fall in the U.S. dollar -- the rise in the Canadian dollar, the euro and the yen -- is reflective of this. Prolonging the current geopolitical uncertainty will only increase the price we all pay.

Sherry Cooper is global economic strategist and executive vice-president, BMO Financial Group.

www.sunspot.net By Dan Thanh Dang Sun Staff Originally published March 14, 2003

Forget Iraq. Forget the economy. Never mind all the reasons why. So far as motorists in Columbia were concerned, paying $2.02 per gallon for premium gasoline is highway robbery.

So they didn't. Most of them bought regular gasoline at $1.79 per gallon - which still was 8 cents higher than the national average and about 12 cents higher than the average at Baltimore stations.

It's not as if they had a choice, many of them groused. Walking isn't an option.

"We are definitely getting gouged," said Kathy McKinley, 43, principal at Bonnie Branch Middle School in Ellicott City. On a lunch break yesterday at the Mobil station by Long Gate Shopping Center, she shelled out $26 for less than 13 gallons of premium blend. "It's probably going to get worse."

While there's no evidence of price manipulation to feed conspiracy theories, fuel experts warn that the frustration will probably get worse, as pump prices are expected to continue rising.

In its weekly report on retail gasoline prices, the U.S. Department of Energy said Monday that the nationwide average price for a gallon of regular unleaded gasoline rose to a 21-month high of $1.712 a gallon.

Compared with a month ago, the cost of a gallon has jumped 4 cents in Baltimore and 10 cents nationwide. Compare that with the $1.22 average a year ago and prices are 48 cents higher, according to the American Automobile Association's daily fuel gauge report.

California pump prices for gasoline are the highest in the country, reaching $2.127 a gallon for regular-grade fuel this week, AAA reported. Prices in San Francisco reached a record $2.251 for regular yesterday.

"I was in a conference with oil experts this week, and I didn't hear anyone predicting that prices were going to drop anytime soon," said Deborah DeYoung, a spokeswoman at AAA MidAtlantic. "We're going to be breaking records we've kept since 1974 pretty soon. We haven't seen prices this high since the gas crisis of the '70s.

"It will add about $500 more for gasoline this year for the average driver, or about $42 more a month," DeYoung said. "It's not pretty."

No one needs to tell that to Debi Harvey.

While driving to a swim meet in Joppatowne with her two sons a couple weeks ago, the 48-year-old Mary Kay cosmetics saleswoman had to fill up her Ford Escort wagon at an Exxon station near Mountain Road.

"When we got to the gas station, the price was $1.679 a gallon," said Harvey, who fills up twice a week to see clients in Pennsylvania and on the Eastern Shore. "Five hours later, after the swim competition, it was $1.739. It's scary that in five hours, they raised it 6 cents a gallon."

"I am absolutely getting gouged," she added. Experts say the higher prices are not the result of gouging, it is a confluence of negative factors - a lot of bad things happening all at once.

Even though the strike in Venezuela has been resolved, production levels there are still down. There were recent concerns about a potential Nigerian oil strike. A much colder winter in much of the Northern Hemisphere forced refiners to make more heating oil instead of gasoline to keep pace with rising demand. And continuing fears about war in Iraq will keep influencing prices, said John C. Felmy, chief economist for the American Petroleum Institute.

"It's the perfect storm in the world energy markets," Felmy said. "The second quarter typically has lower demand because temperatures are warming up and it's right before the driving season, so that could reduce pressure on the markets. But the question of Iraq is a complete wildcard. The final unknown is the economy. Prices could go either way.

"One can't really tell at this point."

Marylanders might also brace themselves for a possible gas tax increase. With a crushing deficit to deal with and a need to balance the budget, Gov. Robert L. Ehrlich Jr. and the General Assembly haven't ruled it out.

Kevin Van Workman supports that idea, even though he is spending $150 a month to drive back and forth between Columbia and Gaithersburg to work at the National Institute of Standards and Technology.

"I know I'm not supposed to say it, but I've always been a proponent for raising gas taxes to cut down driving," the 28-year-old chemical engineer said.

As for why gas in Columbia is more expensive than in areas such as Towson, where regular gasoline is 11 cents cheaper, station owners say higher rent in their area and fuel increases dictated by corporate parents dictate pump prices.

Barbara Stigler, manager of Long Gate Mobil, wants people to remember that the price increases are not her fault. She knows her prices are higher than others, and she can hear the groans when the price board goes higher.

"Whenever we have to change the prices on the board, I try to make the owner go outside and do it," Stigler said. "You know, just in case he's got to dodge bullets or something."

www.sltrib.com With a strike crippling the economy and, some say, fueling a surge of violence in Venezuela, President Hugo Chavez has a lot to pray about. (Victor R. Caivano/The Associated Press)

BY TOD ROBBERSON DALLAS MORNING NEWS

    CARACAS, Venezuela -- Until recently, Jose Gabriel tended to dismiss all the talk of rising crime in Venezuela as the gossip of political alarmists and rumor mongers.     "People talked about it, but nothing ever happened to me," the 28-year-old office clerk said. But as he and his girlfriend waited in line at a gas station on Feb. 12, rumor suddenly became reality.     Three men jumped out of a car, aiming automatic weapons. One fired a shot at Gabriel's feet while the others jumped inside his car, shoving him into the back seat.     Before motorists in other cars had time to react, another of Venezuela's infamous "express kidnappings" was under way. When it was all over less than an hour later, Gabriel and his girlfriend found themselves standing dazed on a roadside with no money, no jewelry, no cellular phones and no car.     When he went to the nearest police station, he said, he had to wait behind four other victims of the same type of crime.     After two months of business and labor strikes and what many regard as a wholesale breakdown of government authority, police statistics indicate an explosion in street crime across Venezuela, with Caracas experiencing the brunt of the problem.     National income has plummeted, spurred by a petroleum workers' strike that had paralyzed exports in what was the third- or fourth-largest supplier of oil to the United States.     Car thefts at gunpoint, armed robberies, assaults and homicides have skyrocketed to unprecedented levels, making Venezuela the second-most-dangerous country in the hemisphere behind war-racked Colombia, according to the Pan-American Health Organi- zation.     The crime epidemic is so pronounced that business groups are warning U.S. executives not to travel to the capital without armed guards and at least one radio-equipped escort car to provide assistance in case gunmen seize the main car. The Caracas international airport has become a major venue for kidnappings.     "Express kidnappings, in which victims are seized in an attempt to get quick cash in exchange for their release, are increasing in Venezuela's capital," the U.S. State Department said in a travel warning updated this month. "Kidnapping of U.S. citizens and other foreign nationals, from homes, hotels, unauthorized taxis and the airport terminal is occurring on a regular basis."     Even piracy along the Venezuelan coastline has become a major problem, the State Department warned.     Gunmen kidnapped a senior American executive and his wife recently and held the two at gunpoint after they had settled into their chauffeur-driven car at the Caracas airport, according to a source close to the executive.    Crime analysts differ on whether a 2-month-old national strike by opponents of President Hugo Chavez has contributed to the rise in crime or had no effect on it.     Official statistics on crime during the strike -- which led to a nearly total shutdown of shops, businesses, restaurants and gasoline stations before it ended last month -- have been hard to come by because of a political dispute between Chavez and the Caracas metropolitan police.     Chavez has ordered the metropolitan police to disarm and has placed troops in many areas because he accuses the local police of siding with the strikers.     What is certain, however, is that the homicide rate for Venezuela is exploding. During the weekend period from 6 p.m. on Feb. 7 to 6 p.m. Feb. 9, for example, 129 people were killed -- including 61 in Caracas, according to police statistics.     In the like 48-hour period March 7 to March 9, 108 were killed, including 34 in Caracas, a city of 3 million.     According to the Pan-American Health Organization, Caracas ranks per capita as the second-deadliest city in the hemisphere, behind Cali, Colombia.     "The difference is, there are guerrillas and war in Colombia, and our people are dying only because of unchecked, violent crime," said Ivan Simonovis, a corporate security specialist and former chief of special operations for the Technical Judicial Police, Venezuela's equivalent of the FBI.

www.amarillonet.com Web posted Friday, March 14, 2003 5:10 a.m. CT By GREG ROHLOFF grohloff@amarillonet.com

With the price of diesel fuel rising for the eighth week in a row and setting its fourth straight record high, the trucking industry is feeling a pinch that is costing jobs.

The squeeze is not yet showing up in the Consumer Price Index, which measures inflation, but Bob Costello, chief economist of the American Trucking Association, said rising prices for goods hauled by truck is just a matter of time.

The Energy Information Administration said in its weekly update Tuesday that the nationwide average stands at $1.771 a gallon for diesel fuel, or 1.8 cents higher than a week ago.

The highest prices are on the coasts, with the East Coast particularly hard hit because of lingering winter weather driving up demand for home heating oil.

Costello said refiners have been squeezed two ways - the rising cost of crude oil because of political turmoil in Venezuela and the looming war in Iraq, and the increased demand for fuel oil on the East Coast.

Fuel oil, like diesel, is a distillate refining product. When production of home heating oil rises, diesel production declines.

The average price nationwide for diesel a year ago was $1.10 a gallon, with $1.20 a gallon on the coasts, said Rusty Dillon of Groendyke Transport, chairman of the Texas Motor Transport Association's Amarillo chapter.

The Energy Information Administration said diesel costs $2.001 a gallon on average in New England, while the West Coast price rose to $1.886 a gallon.

The Gulf Coast region, which includes all of Texas, was the only region to see a decline this week, the agency said, dropping about a third of a cent to $1.697.

That provides little comfort to truckers Robert and Jerry Branum, operators of Branum Trucking north of Canyon. The company, in operation since 1973, hauls boxed beef and pork and groceries for Affiliated Foods.

Fuel costs for a typical 500-mile haul have risen $60 since diesel fuel prices started rising eight weeks ago, Robert Branum said.

Branum Trucking has collected a surcharge of 8 cents per mile on its loads, but the fuel price increases work out to about 16 cents a mile.

Robert Branum figures that he can operate his trucks about three more months with the current losses. After that, he says, he will park them until the price of diesel fuel falls.

"Everything is about the fuel," he said.

Such a move, though, would be made not from financial weakness, but from strength, he said.

The last time diesel prices rose rapidly, in spring 2001, Branum Trucking operated 25 trucks. Now, Robert Branum said, the company operates six trucks and contracts with seven drivers.

Weaker independents have folded since the May 2001 peak prices, he said.

Since then, earnings have been strong enough to allow the company to wait out the fuel cost increases.

While he pays for the difference in the fuel surcharge and the actual cost increase for his six trucks, the contract drivers are owner-operators who pay for the costs themselves.

Dillon said the larger companies such as Groendyke, which runs 23 tractors from its Amarillo terminal and 850 nationwide, are able to negotiate better terms for a fuel surcharge than independents.

The effects of rising fuel prices have not been calculated, but Costello said the organization estimates that for every 10-cent increase in fuel price, 1,000 failures occur among companies with fleets of five or more trucks.

The toll could be heavier among independent owner-operators, he said.