Summer to put brake on gasoline price drop
<a href=www.sun-sentinel.com>sun-sentinel.com By Michael Turnbell Transportation Writer Posted May 9 2003
Retail gasoline prices continued their skid downward this week, but for most drivers, the ride is almost over. Prices have dipped 17 cents per gallon on average over the past seven weeks as crude oil prices continue to tumble in the wake of the Iraq war.
But the price at the pump is still a few cents higher than a year ago and is expected to stay that way throughout the summer.
"With all we've been through in the last few months, that's still not that bad," said Yoli Buss, AAA's traffic safety director. "It's better than we might have expected."
In March, gas prices reached their highest levels ever in Florida and many places around the country.
According to AAA's daily fuel gauge report, the per-gallon average in Fort Lauderdale on Thursday was $1.54. A month ago, that average was substantially higher, $1.71. But a year ago, motorists paid $1.50.
Miami's price is $1.55, vs. $1.70 a month ago and $1.52 a year ago.
In West Palm Beach-Boca Raton, the regular unleaded average posted Thursday was $1.61, better than the average a month ago of $1.74. A year ago, motorists paid $1.55.
For Brenda Wilson, the drop in prices made it possible for her to drive from her Georgia home to visit family in Delray Beach. "Two months ago, I don't think I would've made the same trip," said Wilson, 42, as she filled up her Nissan Pathfinder at a Hess station on Federal Highway at Glades Road in Boca Raton.
Expect gas prices to be on the rise again as the summer driving season swings into high gear on Memorial Day. But the price increases won't be as high as predicted a month ago, thanks to lower crude oil costs, the U.S. Energy Department's Energy Information Administration said Thursday.
"A lot of people are going to be traveling by car," AAA's Buss said. "There are a lot of great air and cruise deals out there to get people traveling again. But there are a lot less flights. So even though there are these great deals, if you don't book your trip way in advance, you're going to miss out."
The war's conclusion certainly helped lower gas prices. The price of crude has dropped dramatically, from almost $40 a barrel prior to the war to less than $30 today.
"Crude oil prices had several dollars extra per barrel built in prior to the war in Iraq because Iraq had threatened to destroy its own oil resources, and that was prevented," said California-based analyst Trilby Lundberg, editor of a national survey of gas stations. "The response of the oil market was a price crash."
Another factor contributing to the price declines is Venezuela's continuing recovery from its oil industry strike, Lundberg said. She said Venezuela is back up to, or close to, its pre-strike production level of 3.2 million barrels per day.
The downward gas price trend isn't expected to continue.
Analysts say consumers didn't buy less fuel when prices soared in March and probably won't slow down when prices inch back up this summer. U.S. gasoline demand is expected to reach a record 386 million gallons a day during the summer, up 1.6 percent from last summer, according to the Energy Information Administration.
In February, Florida Attorney General Charlie Crist asked the Federal Trade Commission to investigate whether Florida's gas stations were improperly increasing prices to take advantage of fears of a war with Iraq. He also asked representatives of major oil companies whether they were withholding oil from the market. That inquiry is still unsettled.
The last time Florida investigated high gas prices, in the 1970s, the inquiry took 17 years and there were no substantial findings.
"Our staff has been in regular discussions with people from the gas companies. But no new issues have arisen from that," said Joann Carrin, a spokeswoman for Crist. "We're continuing to gather information."
Information from The Associated Press was used to supplement this report.
Michael Turnbell can be reached at mturnbell@sun-sentinel.com or 954-356-4155.