Fuming over high gas prices

www.meridianstar.com By William F. West / community editor Feb. 23, 2003

VIEW FROM THE TANK — Patrick Kelly, an employee at BP Express Lane on 22nd Avenue in Meridian, has watched gas prices soar to an all time high for the month of February.

Gasoline prices are all pumped up in Meridian, leaving motorists dismayed or outraged after refilling their tanks.

Locally, the complaints have been frequent long before prices for self-service unleaded regular passed the $1.60 per-gallon mark.

A check of prices in Meridian showed Super Wal-Mart offering the lowest price for self-service unleaded regular at $1.599, but most stations in the city have postings of $1.649.

On Saturday in Hattiesburg, unleaded regular gas was selling at $1.519, about 13 cents lower than Meridian.

Some motorists said they don’t understand why prices in Meridian are higher than cities or towns elsewhere — particularly with the presence of pipelines and massive fuel depots off Interstate 20/59 on the west side of the city.

Local distributors, contacted for a response, preferred to remain silent.

“I believe we’ll pass,” Billy Blaine, manager of Dixie Oil Co., 2918 Fifth St., said when asked for comment last week.

Representatives of two other major local distributors, Maples Gas Co. Inc., and Burns and Burns Inc., also declined to comment.

Expert opinions

Experts monitoring gasoline prices say they can’t speak for Meridian specifically.

But they said high fuel prices nationally result from U.S. dependence on foreign oil, mainly from strife-torn Venezuela, a harsh winter in the north that depleted fuel supplies and worries about a U.S. war against Iraq.

Stacey Wall , an economist, is president of Pinnacle Trust, a Jackson-based wealth management firm. He said he’s concerned about high gas prices being a drag on a national economy that has been struggling since before 9/11.

Wall said the U.S. either needs to defeat Iraq in a quick war or reach a peaceful resolution.

“As long as there’s uncertainty in the air, I think prices are going to continue to stay high,” he said.

Wall said he hopes prices will decline, but he’s also skeptical about the gasoline giants’ marketing philosophy.

“Historically, gasoline companies tend to be real quick to raise gas prices,” Wall said. “And then when oil prices eventually recede, they’re a little bit slower about bringing them back down if they can get away with it.”

“As long as nobody can prove any kind of collusion or anything, they can pretty much do it,” he said.

Wilkerson’s comments

Jerry Wilkerson, executive director of the Mississippi Petroleum Marketers Association, quickly noted that collusion to artificially inflate gasoline prices is a federal offense.

But Wilkerson said he has gotten an earful of complaints about prices from state legislators while lobbying at the Capitol. He quipped that even his minister asked him about the high prices after church last Sunday.

Wilkerson, a Madison resident and a Meridian native, frequently drives here to see his relatives. He said he’s eyed the gas prices here but doesn’t see differences between what’s posted in Meridian or elsewhere.

“Sometimes it’s cheaper over there and sometimes it’s cheaper in Jackson,” he added.

Wilkerson said he did receive complaints in the late 1990s about high prices in Indianola and Greenwood. In 1997, the former Jitney Jungle supermarket chain opened a Pump and Save in Greenwood and engaged in price war that culminated with self-service regular unleaded dropping to 78.9 cents a gallon.

Wilkerson represents about 300 wholesale distributors and convenience store chains in the state.

“Of course this is always a bad time for us when prices are going up like this,” he said. “Quite honestly, I hear this all the time, people saying, ‘Well, you all are making a killing off of this.’”

“And it’s the reverse,” he said. “Our folks lose money when the prices are going up.”

Wilkerson was referring to longstanding arguments that there are wholesalers and retailers who try to hold off increasing prices at the pumps as long as possible before passing costs on to the customers.

Other viewpoints

Kent Young, manager of public affairs for Citgo Petroleum Corp. said the corporation has received some feedback about high prices.

“But so far it’s been fairly light,” he said.

Citgo, based in Tulsa, Okla., supplies more than 13,500 stations and has long had a presence in the Deep South.

The corporation has a huge fuel depot at 180 65th Ave., but Young said it doesn’t set fuel prices at the retail level. He said that’s the responsibility of the marketer or the dealer.

Young, asked whether he believes prices will decline or stabilize, replied with a laugh: “If I had the answer to that, I wouldn’t be where I am right now.”

Joe Sims is president of the US Oil and Gas Association in Jackson, formerly known as Mid-Continent Oil and Gas. The association represents the production end of the fuel business.

Sims said a problem that could be on the horizon isn’t in oil but in natural gas.

Sims recalled the natural gas crisis in the severe winter of early 2001, when masses of poor people found themselves unable to pay astronomical heating bills resulting from price increases.

Sims said he believes the problem is that the U.S. hasn’t had a robust program for natural gas exploration.

“The country just sort of needs to take a deep breath and really get serious about an energy policy,” he said.