Gasoline prices hit seasonal record high
www.pantagraph.com Saturday, March 8, 2003 By Eric Freehling Business editor
BLOOMINGTON -- Gasoline prices across the state have reached a record high for March, but prices are expected to continue to climb and set record highs for April, too.
The average price for a gallon of unleaded, self-serve gasoline across the state Friday was $1.71, according to Mark Bruno, a spokesman for AAA Chicago. "These are the highest prices we've seen in March since 1974 when we started the survey," he said.
In Bloomington-Normal, prices at the pump were a nickel a gallon higher. An informal survey of Twin City gas stations taken Friday afternoon showed the average price for a gallon of regular, unleaded gas was $1.76.
Bruno said a year ago, the average price of gasoline was $1.23 a gallon.
A month ago, the average price was $1.51.
The attorneys general of Illinois, Wisconsin and Iowa have asked the Federal Trade Commission to examine whether some gasoline wholesalers or retailers are unjustifiably raising prices.
In a letter sent Friday, Lisa Madigan of Illinois, Peg Lautenschlager of Wisconsin and Tom Miller of Iowa urged FTC Chairman Timothy Muris to have the agency examine the markets in their three states and asked for assistance in determining if there is any evidence of illegal price collusion.
Bruno blamed the price rise the price of crude oil, which hovered around $40 a barrel Friday, and on increasingly tight supplies of fuel caused as domestic refineries begin production of summer grade fuels that are mandated to go on sale May 1.
Dave Sykuta, executive director of the Illinois Petroleum Council, which represents state refiners and marketers, blamed four factors for the price increase.
He said demand for gasoline is up 3 percent so far this year, while at the same time unrest in Venezuela has disrupted oil imports from that country.
In addition, Sykuta said, continuing cold weather in New England has delayed refineries' changeover from home heating oil to gasoline, and the cost of crude oil is fluctuating from $37 to $40 a barrel because of "fear and anxiety about what may or may not happen in the Middle East."
The federal Energy Information Administration said by the end of February, gasoline inventories moved toward five-year lows, which is one of the reasons current pump prices are high.
The fuel crunch is caused, Bruno said, because refineries must begin producing reformulated gas that must meet clean air standards while continuing to produce winter-grade gasoline.
"There are 14 blends of reformulated fuel. It cuts into production time because the refineries just don't have enough capacity to meet the increased demand," he said.
Along with the Iraq situation, Bruno said, "Unfortunately, we've got a number of different things conspiring against us, and it's fair to say we're not going to see prices go down anytime soon."
In fact, the federal Energy Department predicted gasoline prices will reach a record national average of $1.76 a gallon in April.
The EIA said pump prices will remain around $1.70 a gallon during the summer driving season.
"It's really difficult to say when we are going to get any price relief," Bruno said.
Sykuta said it was pointless to forecast gas prices.
"A lot of things could change between now and summer to make it better or worse," he said.