$2 a gallon -- and climbing

www.miami.com Posted on Sat, Mar. 15, 2003 BY DALE K. DuPONT ddupont@herald.com

Gas in South Florida has crashed through the $2-a-gallon barrier.

Prices for higher-grade fuel are inching up over the magic mark, much to the dismay of drivers and dealers.

At a Shell station in downtown Fort Lauderdale, premium was going for $2.08 Friday. A Mobil station across the street was holding the line at $1.99. At a Shell on South Dixie Highway in South Miami, it was about $2.02.

If it's any comfort, the average price for regular in California is already $2.10 a gallon, said Geoff Sundstrom, spokesman for the automotive club AAA in Orlando.

''It's outrageous,'' said John Gauthier, who was filling up with $1.84 regular at a Fort Lauderdale Shell and did a double take upon seeing the premium price.

High-octane prices go with such high-performance cars as Corvettes and Porsches, but 80 percent of all cars run on regular, AAA says.

Station employees say they merely raise their prices when the oil companies charge more.

And when drivers complain?

Leslie Calli, a station manager on North Federal Highway, gives them Shell's customer-service number.

''We aim to offer a competitive wholesale price to our dealers,'' said Shawn Frederick, spokesman for Motiva Enterprises, a Shell affiliate. ``From there, it is up to the independent dealer to set his own street price.''

The American Petroleum Institute cites several reasons for the price hike: the recent strike in Venezuela, which reduced exports to the United States; tight worldwide crude-oil supplies; and nervousness about a possible U.S.-Iraqi war, which has traders bidding up prices.

Oil prices topped $35 a barrel Friday. That's down slightly from several weeks earlier, when they reached $37, their highest level since the last half of 2000.

Before that, oil prices had not hit such levels since late 1990, when the United States was last close to war with Iraq.

''I don't know of any other industry that raises their prices on anticipation,'' said Pat Moricca, president of the Gasoline Retailers Association of Florida, which represents independent dealers.

Through 2002, gas prices were closely tracking the rate of inflation. In March 1993, the national average for regular was $1.11. That translates to $1.39 in 2002 dollars (the latest adjustment figures available).

The actual average last March was $1.239. On Friday, according to AAA, it was $1.715 -- a 38 percent increase. The Consumer Price Index rose just 2.6 percent from last year's.

Yet the current price is not a first for the state, AAA's Sundstrom said. The auto club got reports of $2 in Gainesville and Tampa in early February. (AAA does not track prices by brand.)

Still, $2.08 may be a Florida high, Moricca said.

Wholesale distributors sometimes allow stations to buy only a certain amount when supplies are getting low, Sundstrom said.

In some cases, industry-owned stations can get more fuel than the independents.

''We are on tight inventories of gasoline across the country,'' said Sundstrom, adding that he had not heard of South Florida's being one of those areas.

Moricca sees independent stations as being squeezed because of contract restrictions that prohibit brand-name retailers from buying on the open market the way some big discounters can.

Profit margins should be 15 to 20 cents, he said.

''These dealers,'' he said, ``are working on a penny to five cents.''

And if you're tooling around downtown Fort Lauderdale in a Corvette, here's the price of filling your tank with $2.08-a-gallon gas: $41.60.