Legislators get a tankful of bad news - Gas prices could go even higher next year, industry warns

seattlepi.nwsource.com Wednesday, March 12, 2003 By STEVEN FRIEDERICH SEATTLE POST-INTELLIGENCER REPORTER

OLYMPIA -- State lawmakers yesterday quizzed oil industry officials about the spike in gas prices and were told petrol could cost even more at the pumps this summer.

In the Seattle area, drivers paid an average of $18.52 to fill 10-gallon gas tanks with regular unleaded gas on Friday, compared with $12.14 a year ago, according to the most recent data from AAA.

The direct out-of-pocket pinch consumers are feeling is the reason legislators held a work session on current oil and gas prices. Another hearing -- with public comment -- is scheduled for Friday.

"People expect the price of everything to go up," Rep. Laura Ruderman, D-Kirkland, told a spokesman from a petroleum association. "It was $1.35 at the cheap station near my home; as of Friday it's $1.81. That looks like a spike. The thing that's changed is you are taking advantage of the increased war talk."

Ruderman put it simply, "Tell me how to tell my constituents that price is reasonable."

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

Anita Mangeles, of the Western States Petroleum Association, told legislators that demand is higher than supply right now.

"Iraq has not a thing to do with this," countered Tim Hamilton, spokesman with the Automotive United Trades Organization. "I believe we'd be here today if we shot Saddam and installed the pope."

Hamilton warns that gas prices could even go higher. Typically, the winter months see the lowest spike of gas in the year, but that wasn't the case this year. And summer months see as high as a 50-cent burp.

"Why have prices gone up? In a word: Crude," she said. "Crude oil costs have doubled to $37.77 now compared to $18.00 last year."

Competition also keeps gas prices down. For example, Rep. Richard DeBolt , R- Tacoma, said a gas station in his district charges $2.05 just because it's a mile off the freeway.

FOR MORE INFO To read AAA's latest information on gas prices, go to www.fuelgaugereport.com