Despite gas prices, cars keep running --AAA sees more switching from air to land travel

<a href=news.mywebpal.com>The Jeffersonian.com 04/03/03 By Bob Allen

Even though gasoline prices are up more than 25 percent in Maryland and the Baltimore area from a year ago, AAA Mid-Atlantic says it hasn't seen signs that people are rethinking travel plans.

"I don't think we've gotten there yet," Deborah DeYoung, AAA Mid-Atlantic's manager of public and government relations, said Tuesday. "The 200 travel agents we work with are telling us that people are still switching from airline to driving trips."

With pump-side gasoline prices in Maryland around $1.66 per gallon for regular (only about 6 cents short of a record high) and $1.65 nationally (down a cent or two from last week's record high), DeYoung said the average driver is spending about $42 more a month than a year ago.

Rick Gordon, owner of Gordon's Citgo at 7101 Reisterstown Road in Pikesville, says he's heard a lot of complaints about prices, "but I haven't seen any changes" in buying habits.

In agreement are an attendant at Caton Texaco at 3300 Washington Boulevard in Lansdowne as well as Adrian Hughes, owner of Hughes's Shell on York Road in Timonium.

"People are more or less switching from premium to plus or regular gas," he added. "But that happens all the time when prices go up."

But Mike Dechelman, owner of Randallstown Getty at 9901 Liberty Road, said his sales have declined since prices rose. "Even though we always take a 'cheapest-on-the-street' approach, our sales have gone from 2,000 gallons a day to 1,200 or 1,300 gallons a day since prices went up."

Dechelman said he's unsure why sales have dropped or where people are buying the gas they used to buy from him. He speculated that people may also be bargain hunting for gas.

"It's very upsetting to buy gas at these prices," Dechelman admitted.

He said that on a recent trip to Ocean City, the prices varied greatly. "It was $1.74 a gallon in Easton, $1.49 in Cambridge and $1.49 in Ocean City," he recalled.

And prices remain high even though crude oil prices have dropped from nearly $40 a barrel a couple weeks ago to around $25.

Industry analysts predict that market volatility due to the war, the shut-down of Nigerian oil fields, ongoing shortfalls in Venezuela's production due to political unrest and the increased demand for gasoline by summer travelers will keep pump prices high for the short term.

Industry analysts with whom AAA confers also predict that crude oil prices will probably not drop below $20 a barrel or rise above $40 in the foreseeable future.

"Experts feel that the president would have to dip into the 600 million gallons in the Strategic Petroleum Reserve" if prices did go above $40, said DeYoung.

"Any recession we've ever had has been preceded by a spike in oil prices," she added. "Beyond the prices we're paying at the pump, that's the bigger picture."

Regardless of market conditions, gasoline prices typically rise in the late spring in anticipation of increased demand by vacation travelers.

Summer prices are also impacted by the added costs of pollution-reducing additives required for blends of gasoline used in the warmer months.

Still, DeYoung doubts current prices will dampen many travel plans. "The price of jet fuel has also risen," she said. "And if you look at specifics, like, for instance, the additional cost of driving (from Baltimore or Washington, D.C.) to North Carolina's Outer Banks is only about $20. So it's not prohibitive. At least not yet."

Plus, she insists, "People are stressed out these days. Between the snow and war and the economy they need their vacations."