Gasoline prices on a trip upward

www.nj.com Tuesday, March 18, 2003 By TOM HESTER JR.

As war in the Middle East looms, gasoline prices are nearing record highs in the Trenton region and prices are expected to continue increasing as the summer months approach.

Despite the accelerating pump prices - the national average is at a record high $1.719 - motorists are being urged to avoid rushing to fill the tank if war begins in Iraq. AAA Mid-Atlantic said a panic could cause needless fuel shortages.

"Engaging in panic-buying can get us into those gas lines that we had in the past," said Pam Maiolo, spokeswoman for AAA Mid-Atlantic. "There's no reason to think we're going to run into a gas shortage, but a sudden run on the pumps can create localized outages that don't have to happen if you consume gasoline as you normally do."

AAA's fuel gauge report, which surveys 60,000 gas stations daily, reported yesterday the national average for unleaded gasoline has hit the highest level recorded, at $1.719 per gallon, topping the previous high of $1.718 per gallon set on May 15, 2001.

The average New Jersey price for regular unleaded gasoline was $1.59 per gallon yesterday with the average price 2 cents higher in the Trenton area, Maiolo said. The highest average price recorded by AAA for regular unleaded in the Trenton area is $1.66 per gallon on June 7, 2001.

The Trenton area average for regular unleaded is nearly 49 cents more per gallon than a year ago, when it was $1.12 per gallon amid a slowdown in fuel consumption after the Sept. 11, 2001, terrorist attacks.

Diesel fuel also is more expensive, up to $1.83 per gallon in Trenton, compared to $1.20 a year ago, according to AAA, which said the Trenton record for diesel is $1.92 per gallon on Feb. 14, 2000.

In Pennsylvania, the average price for regular unleaded gasoline was $1.67 per gallon yesterday, according to AAA's survey.

The U.S. Energy Department predicted the national average for regular gas prices will jump to $1.76 per gallon in April, then hover at $1.70 per gallon through the summer. But Maiolo said it was difficult to guess what may happen to prices if war erupts.

"We're just in kind of a wait-and-see hold, as everyone else is," Maiolo said. "We know the price continues to go up. It's not going to get any better as time goes on."

Analysts said gas prices have soared in the last month because of war fears, high crude oil costs, heavy heating oil demand and tight crude oil inventories, spurred partly by labor turmoil in Venezuela that cut production.

The price of a benchmark crude, West Texas Intermediary, averaged $36 a barrel, a level not seen since October 1990, just before the start of the 1991 Gulf War, the Energy Department said.

Area residents were wary yesterday as they filled up at a Ewing gas station.

Hopewell Township resident Herb Hughes said he is spending more than $20 to fill his minivan and is expecting to pay higher fuel costs if the country goes to war against Iraq.

Adrienne Earle said she is spending about $18 to fill her tank, compared to the $15 she was spending a couple months ago. Earle, a student at The College of New Jersey, said gas prices are the least of her worries.

"I'm more concerned about going to war than the actual gas prices," she said.

Katlain Catrambone, who commutes from Philadelphia to Ewing, said the $10 she used to spend to fill her pickup truck now fills just half her tank, but her worse fear is also war.

"I don't mind if the gas costs more as long as we don't have a war," she said.

The national average, while a record high, still doesn't compare to 1981 if inflation is considered. Motorists would have paid $2.90 per gallon in March 1981, using today's dollar, the Energy Department said.

New Jersey prices remain cheaper than other parts of the nation, where average prices have soared to nearly $2 per gallon for regular gasoline. The average price on the West Coast is $1.93 per gallon, according to AAA and the Energy Department. In some West Coast locales, prices have topped more than $2 per gallon.

The Gulf Coast was the only region where prices have declined.

Maiolo credited New Jersey's gas tax with helping to keep Garden State gas prices in check. New Jersey's 10.5-cent gas tax ranks as third lowest in the nation, behind only Alaska and Alabama. New York's gas tax is 22 cents a gallon, while Pennsylvania's is 26 cents.

February and March are typically when gas is cheapest, with prices traditionally increasing in the summer as travel demand rises and cleaner fuel is required, Maiolo said.

The Energy Department's short-term forecast stated: "Even without additional disruptions to the world (oil) supply in the near term, prices are likely to remain on the high side and subject to substantial volatility through 2003."

Maiolo advised motorists to shop for the best price, try to cut fuel consumption and keep vehicles properly maintained to increase fuel efficiency.

While the government said price gouging was found after the Sept. 11, 2001, attacks in a few local markets, it doesn't expect gouging is a problem now. The Energy Department blamed the increased prices almost entirely on the high crude oil prices. Staff writer Eva Loayza contributed to this report.