Gasoline prices level despite war outbreak - Michigan drivers find no gouging at pumps
www.freep.com March 21, 2003 BY JOCELYN PARKER FREE PRESS BUSINESS WRITER
Though jitters remain about the U.S. war with Iraq, drivers pulling into metroDetroit filling stations have found solace in at least one thing: steady gas prices.
Even with the conflict under way, gasoline prices in Michigan appeared largely unchanged Thursday as some war fears began to subside.
"I'm relieved," said Mark LaGuire, a Saginaw resident who was pumping gas at an Amoco station on Warren in Detroit, where regular unleaded was $1.74 a gallon. "I really thought it would be $2 a gallon today."
AAA Michigan spokesman Jim Rink said he hadn't received reports of gas price gouging in the war's outset. Monday, when AAA released its last survey, the average price of a gallon of self-serve regular unleaded stood at $1.77, up a penny from last week. The Detroit-area average was $1.72, up 0.2 cent from last week.
Crude oil prices have tumbled in recent days on beliefs that the war would bring a quick victory. Also, the Organization of Petroleum Exporting Countries has promised to maximize production to make up for any disruption in crude oil exports from Iraq.
Rink said that after President George W. Bush's ultimatum to Saddam Hussein on Monday, the price of oil fell below $30 a barrel for the first time in months. Last week the cost of crude was hovering near $40 a 42-gallon barrel, the highest it's been in more than two years, on war fears and a petroleum workers strike in Venezuela.
Crude oil for April delivery closed Thursday at $28.61 on the New York Mercantile Exchange. Experts also say the uncertainty about war is gone now that the conflict has started.
"Like the stock market, oil is also traded, and the thing that traders hate is any uncertainty," Rink said. "War brought a level of that certainty back."
More than half the price people pay at the pump is determined by the cost of crude oil.
Matthew Cordaro, a business professor at Long Island (N.Y.) University, said gas prices are likely to fall in about a month, given the fall in oil prices. But a terrorist attack or other unforeseen event could keep prices high.
While prices have stabilized, some Detroit-area motorists remained incensed about the costs.
"I feel like they're still gouging us," said Lana Frank of Wayne, who pumped gas at a Clark station on Rochester Road in Troy. "It's nice to see it's leveling off, but what's making it $1.67?"
Thursday, Michigan Attorney General Mike Cox warned gas station operators against unnecessary increases in gas prices due to the war. Stations found guilty of gouging are subject to $25,000 in fines. After the Sept. 11, 2001, terrorist attacks, 48 stations were required to refund more than $100,000 in overcharges to consumers.
Contact JOCELYN PARKER at 313-222-5391 or at parker@freepress.com. Free Press staff writer MATT HELMS and the Associated Press contributed to this report.