Experts: Gas prices could skyrocket

www.tribune-democrat.com By JEFF McCREADY, TRIBUNE-DEMOCRAT BUSINESS WRITER February 24, 2003

A gasoline barge that exploded Friday is the latest development that could send the price of gasoline even higher. The explosion in New York that killed two and injured one critically occurred on a barge containing about 4 million gallons of unleaded gasoline. The fire sent the future cost of petroleum skyrocketing. In a little more than a month, the nationwide price of a gallon of self-service unleaded gasoline has jumped 13.4 cents a gallon, American Automobile Association said. The average price of a gallon of self-service unleaded at four stations in Cambria, Somerset and Bedford counties surveyed by The Tribune-Democrat on Friday was $1.61. “You just have to grin and bear it,” said Bill Blasko of Johnstown as he pumped gas Saturday at Sheetz, 1757 Goucher St. in Lower Yoder Township. The hike has hit him hard because he travels in his job as a real estate appraiser. Tonya Spada of Southmont said she tries to do more walking as a way of conserving gas. She was interviewed Saturday outside the First National Bank of Pennsylvania office near Minno Drive in Lower Yoder. Experts said no one thing – be it fear of a terrorist attack or uncertainty about a war with Iraq – accounts for the dramatic increase in the price of a gallon of gasoline. While it is difficult to say whether the price will go up, go down or stabilize, the bad news is that the cost of oil is nearing record levels not seen since the 1990s. “It’s just the uncertainty in the markets,” said Dan McMahon, executive vice president of operations for Sheetz Inc., Altoona, a multi-state convenience store chain that sells gasoline. “I don’t think it is as much supply and demand as a fear issue.” He said the price has leveled off a bit during the past two weeks, “but it has stabilized high.” And the harsh winter has not helped the situation, McMahon said. “You just can’t predict what is going to happen,” said Bill Bush, a spokesman for American Petroleum Institute, a Washington trade organization representing oil and gasoline dealers. Keys to controlling fuel bills, AAA said, are to shop around for the best price, look for ways to cut down on fuel consumption and keep vehicles properly maintained so as to increase fuel economy. Gasoline station operators such as Ed Haberkorn said they never know what the price will be until that next load arrives. Haberkorn, owner of Westmont Mobil, 1735 Goucher St., said Friday his price has stayed the same during the past week. “While it is true the continuing loss of oil and gasoline exports from Venezuela and recent cold weather in much of the nation have affected fuel inventories, nothing fully justifies the dramatic increase in gasoline prices experienced across the United States in the last month,” AAA said in a release last week. U.S. oil imports from Venezuela all but disappeared after a nationwide strike began in December, but indications are that things are starting to return to normal. Some analysts predict a decline in crude oil prices if a war brings about no major supply disruptions in the Middle East and Venezuelan oil output continues to rise. March contracts for crude rose to $37.16 a barrel at the middle of last week. Any drop in the price per barrel translates into a drop in the price at the pump. No matter what the price someone will complain, Haberkorn said. “Some people complain, some take it in stride,” he said. Haberkorn said the price he pays has not gone up in the past couple of loads. “People have to understand that we went into the beginning of the year with very low stocks,” Lawrence Goldstein, president of New York-based Petroleum Industry Research Foundation, told The Associated Press last week. He said crude oil prices have jumped 19 percent because of the fear of war, an increase that also has affected the price of heating oil and diesel fuel. A gallon of diesel averages $1.70 or 50 cents higher than a year ago while gasoline averages $1.66 a gallon, up 54 cents from a year ago, the federal Department of Energy said. AAA said the highest recorded nationwide price for regular unleaded was $1.72 a gallon on May 15. In mid-January the nationwide AAA average price was $1.47.