Relief at fuel pump likely effect of assault

www.pensacolanewsjournal.com PUBLISHED SATURDAY, MARCH 22, 2003 Derek Pivnick

The start of war in Iraq might mark the start of lower gasoline prices.

While prices remain at or near all-time highs, the price for a gallon of fuel could drop as much as 40 cents from current levels in the next five or six months, said Jim Smith, president and CEO of the Florida Petroleum Marketers Association in Tallahassee.

"The problem, and the reason the price of crude oil went up so far and so fast, was because it was unclear what was going to happen," Smith said.

Now that the war is under way, rumors have less impact on oil prices, he said.

The same thing happened in 1991 during the first Gulf War.

"The minute hostilities began, crude prices fell, and it's the same thing that's happening now," Smith said.

AAA Auto Club and petroleum industry representatives issued a joint statement Thursday to assure American consumers that fuel supplies won't be interrupted, and inventories of gasoline and diesel are adequate to meet normal demand.

"There is enough fuel around. We won't have any shortages," said Yoli Buss, director of traffic safety for AAA Auto Club South in Tampa.

It's too early to tell whether war will have any impact on the desire for Americans to travel this summer, when fuel demand typically increases, said Mable Brown, assistant manager at the Pensacola office of AAA Auto Club South.

Brown said her office received no cancellations of travel plans after the U.S.-led assault began.

Other factors led to the recent rise in gasoline prices, such as a strike in Venezuela, which reduced crude oil production.

"I prefer to see long periods of declining prices," said Richard Puckett, president of Puckett Oil Co. in Pensacola, a petroleum marketer. When prices increase, it pressures profit margins, Puckett said.

The highest recorded average price for gasoline in the Pensacola area was Tuesday. A gallon of regular unleaded was $1.688, according to the auto club's daily fuel gauge report. Friday's prices were fractionally lower, with a gallon of regular unleaded costing $1.683.