Gasoline prices surge on war fears

Posted on Sat, Feb. 08, 2003 www.charlotte.com Carolinas see cost jump almost a dime in month DIANNE WHITACRE Staff Writer

Gasoline prices in the Carolinas have jumped almost a dime in the past month, and one analyst says the likelihood of war in the Mideast could send them to near $2 a gallon.

Pump prices nationwide are at the highest level in 17 months, since the terrorist attacks in New York and near Washington.

On Friday, major suppliers, including Exxon and Phillips raised prices at their terminals by 5 to 7 cents a gallon -- a rise that will soon show up at local stations.

"In the next 90 days, we could see fuel price swings (upward) of 10 to 15 cents a gallon each week," said Tom Kloza, chief oil analyst at the Oil Pricing Information Service, a leading tracker of the petroleum industry.

North Carolina's average price for a gallon of regular grade is $1.518, up more than 9 cents in the past month. South Carolina has seen an 8 cent increase, to $1.454, according to AAA Carolinas and OPIS.

Currently, Charlotte has some of the lowest gas prices in the state, averaging $1.489 for regular, a nickel cheaper than Raleigh and 3 cents less than Greensboro.

The U.S. average is $1.557 a gallon, up 9.5 cents in the past month. It's $1.425 in Atlanta (up 9.4 cents); $1.63 in Washington, D.C. (up 5 cents); $1.704 in Los Angeles (up 10.5 cents), and $1.647 in Chicago (up 12 cents).

Jackie Andrews of Charlotte's Coulwood neighborhood paid $1.49 a gallon Friday at a South Boulevard station.

"I know it was at least a nickel cheaper last week," she said. "I don't need a full tank, but I wanted to fill up before it went up again."

Unrest in the Mideast could affect gasoline supplies for many months, said Stanley Black, an economics professor at UNC Chapel Hill. "I'm afraid we are in for a long siege of increasing prices."

The U.S. Department of Energy says colder-than-normal weather and reduced oil supplies from Venezuela also have fueled the higher prices.

The United States imports 55 percent of its petroleum. If war begins, shipping costs from the Mideast will rise, analysts say.

Crude oil is selling at $34.50 a barrel, up $12 in a year. The price could reach $40 a barrel if war breaks out with Iraq, said Mark Mahoney of OPIS.

Wholesale gasoline prices also are surging. A month ago they were 85 cents a gallon in the Southeast and now are $1.05 a gallon, said Fred Rozell, retail pricing director with OPIS.

Those higher prices show up at the pump about 10 days later, he said, when cheaper gas sells out.

Gas prices generally fall slightly at this time of year as refineries switch from heating-oil production to gasoline.

Heating oil is up 37 cents a gallon in the past year, including almost 4 cents in the past week, according to the U.S. Department of Energy, and averages $1.53 a gallon nationwide.

The cold winter increased demand for heating oil, which reduces gasoline production.

Dianne Whitacre: (704) 358-5099; dwhitacre@charlotteobserver.com