Can you spare a dime?
www.zwire.com By HANK SCHALLER , Of The Oakland Press 02/04/2003 February 4, 2003
Fears of a war with Iraq and a continuing strike in Venezuela that has cut oil production there have caused gas prices in Oakland County to soar by more than a dime a gallon in the past two weeks. Motorists in Oakland, Macomb and Wayne counties were paying nearly 4 cents more a gallon at the pump Monday than the national average price of self-serve regular unleaded gasoline, according to AAA Michigan.
"The possible war with Iraq and the Venezuelan strike are the biggest factors that we hear about," said Nancy Cain, spokeswoman for AAA Michigan, which does a weekly survey of gas prices throughout Michigan and in the Detroit area.
That view was shared by Ed Weglarz, executive director of the Lansing-based Service Station Dealers of Michigan, a lobbying group for independent service station owners.
"Venezuela and a possible war in Iraq are the two prime factors," Weglarz said Monday. "That strike in Venezuela represents about 10 percent of all the imported oil the United States gets.
"The oil market is almost like the stock market. It doesn't like uncertainty so when there is any doubt, the price of crude oil goes up."
The increasing wholesale price of gas paid by service station owners has led to a situation where the profit margins seldom rise above three cents or four cents a gallon and some dealers, because of local competition, have to sell gas at cost, Weglarz said.
"Wholesale prices are changing as much as three times a week, with the largest price increases in January coming on Jan. 8 when wholesale prices rose nine cents and Jan. 21 when wholesale prices rose 11 cents a gallon," he said.
A survey of 100 service stations in Oakland, Macomb and Wayne counties conducted Monday found the average price of self-serve regular unleaded gasoline was $1.553 a gallon, up 7.5 cents over the past week and up 10.4 cents a gallon since Jan. 21.
Gas was selling for as little as $1.459 a gallon at some stations surveyed. Locally, the average price of gasoline is 33.1 cents a gallon higher than it was a year ago.
Meanwhile, a survey of 300 service stations throughout Michigan found the statewide average price of gasoline was $1.579 a gallon, up 4.4 cents over the past week and up 8.7 cents a gallon since Jan. 21. The statewide average price was up 41.4 cents a gallon from a year ago.
A nationwide survey of gas prices conducted by AAA Monday found that the nationwide average price of self-serve regular unleaded gasoline was $1.504 a gallon, up 2.7 cents a gallon over the past month.
Pressure on gas prices could continue to build Wednesday when Secretary of State Colin Powell is expected to offer evidence to the U.N. Security Council in support of claims by the United States that Iraq possesses banned weapons.
On Feb. 14, Chief U.N. weapons inspectors Hans Blix and Mohamed ElBaradei will deliver a second progress report on weapon inspections, which could also help swing the diplomatic balance on military action against Iraq.
Although banks, shopping malls, factories and schools in Venezuela reopened Monday as a 64-day-old nationwide strike designed to topple President Hugo Chavez eased, a walkout continued in the oil industry.
Hundreds of thousands of Venezuelans have signed petitions demanding that Chavez resign.
Chavez said crude oil production in Venezuela is about 1.8 million barrels a day, down from 3 million barrels a day in November and as low as 150,000 barrels a day at the height of the strike. Striking workers say output is now slightly more than 1 million barrels a day.
Oil provides half of Venezuela's government income and over 70 percent of foreign exchange. The oil strike has cost more than $4 billion, the government estimates.
Gas prices up 10 cents Here's how the average price of self-serve regular unleaded gasoline has increased in the past two weeks in Oakland County:
- Jan. 21 - $1.449 a gallon
- Jan. 27 - $1.478
- Feb. 3 - $1.553