Gas prices streaking upward - Cost per gallon hits record levels in Seattle area and across the state

seattlepi.nwsource.com Tuesday, March 4, 2003 By PAUL NYHAN SEATTLE POST-INTELLIGENCER REPORTER

Gasoline prices continued to rise at pumps around Washington state, as the average price of a gallon of regular unleaded hit record levels in Olympia, Spokane, Tacoma, Seattle and other regions in recent days.

In the Seattle area, drivers paid, on average, $18.39 to fill 10-gallon gas tanks with regular unleaded gas on Friday, while they paid $12.14 a year ago, according to the most recent data from AAA.

Drivers have watched gas prices rise steadily over the past month. Local gas station owner Ric Kastner said the price he paid for a gallon of gas for his pumps in Magnolia jumped 41 cents in 24 days.    Phil H. Webber / P-I   Ric Kastner, who owns Ric's Automotive & Texaco Inc. in Magnolia, fills a gas tank at his station; his premium was selling for $2.15 9/10 a gallon yesterday. "I have never seen them (gas prices) go up this high this fast," he said.

"I have never seen them go up this high this fast," said Kastner, who owns Ric's Automotive & Texaco Inc. in Magnolia and has worked in the oil business for the past 34 years.

Industry officials blame some of the price run-up on tensions over an impending war with Iraq and the labor dispute in Venezuela, which is settled but continues to hamper supply.

"You do have speculation about the war with Iraq that does increase concern about future supply," Exxon Mobil Corp. spokeswoman Carolin Keith said.

But Washington state also lacks the level of competition found in other regions of the country, according to Tim Hamilton, executive director of the Automotive United Trades Association in Olympia.

"At the retail (level), there is a limited number of companies marketing it," Hamilton said. "The four big guys control a major amount of the retail market: BP Plc.'s Arco, ChevronTexaco Corp., Shell Oil Co. and ConocoPhillips, which owns the 76 brand."

Kastner said retailers are not profiting from the higher prices.

"If I was making all the money, I'd be smiling," Kastner said. "But the dealers aren't getting rich."

Keith said Exxon Mobil prices reflect the global market.

"It isn't an issue of gouging; it's an issue of market pressure," Keith said.

The reasons and level of profits behind the rise may be unclear, but the increases continued last week. After hitting a record level in Seattle, Bellevue and Everett on Wednesday, $1.77 a gallon, prices kept rising to $1.84 by the end of Friday, according to AAA.

In Olympia, the price for a gallon of regular unleaded also rose to $1.74, up sharply from $1.35 a month ago and $1.14 a year ago, the automobile association reported.

In Spokane, regular gas went for $1.72 a gallon, another record.

Nationwide, the price of gasoline also jumped. A gallon of regular unleaded gas cost, on average, $1.69 across the nation, a 21-month high, the Energy Department reported yesterday.

Oil-industry executives say the price of crude oil, which rose 60 percent over the past year, is the main culprit behind the increases.

Refiners also have been slow to begin raising production of gasoline, which normally occurs at this time of year, because they've focused on making heating oil during the cold winter in the Northeast.

Texaco station owner Kastner offered a little hope for beleaguered drivers. "This summer, I wouldn't be surprised if they (prices) dropped," he said.

This report includes information from Bloomberg News.