www.zwire.com By: Andrea Kiliany Thatcher March 06, 2003

Surprisingly, gas prices in Pennsylvania are eight cents lower than the national average. However, consumers won't be surprised to find that the average is more than 50 cents higher than numbers for the same time one year ago.

      While the national average is currently $1.67 for regular unleaded fuel, Pennsylvania is hovering around $1.59. This holds true for Elizabethtown in specific. At press time, $1.59 is the highest price in the group of stations sampled.

      Of the stations sampled, Citgo and Mobile had the highest prices at $1.59 for regular unleaded, $1.69 for middle-grade, and $1.73-$1.75 for high octane.

      Shell was slightly lower with prices of $1.58, $1.66 and $1.69. In the middle with $1.57, $1.65 and $1.73 was Turkey Hill.

      The lowest priced gas among the sampled stations in Elizabethtown at press time was found at Giant. Their prices were $1.55, $1.62 and $1.68.

      The U.S. Energy Information Administration reports that gas prices are at the highest since 2001 and have been rising steadily for more than nine weeks. Some explanations include the colder-than-expected winter, a strike in Venezuela and worries about the war with Iraq.

      When paying so much more for gas, consumers become more concerned with where that money is going.

      Thirty-seven percent of your money goes towards the crude oil itself. This is determined by the Organization of the Petroleum Exporting Countries.

      Taxes make up twenty-seven percent of the price of gas. Federal excise taxes are 18.4 cents per gallon, and state excise taxes average around 19.96 cents per gallon. State sales tax, as well as local and city taxes, are sometimes added to this.

      The cost of refining the oil makes up about twenty percent of the price paid at the pump. Less than ten percent of the price is attributed to distribution and marketing. The crude oil is transported to the refinery, the resulting gasoline is shipped to distribution centers and from there it goes to gas stations. The cost of all this transportation, as well as that of marketing a particular brand of oil, is passed along to the consumer.

      Station markup, the money a service station adds to the price they pay in order to make a profit, is usually only a few cents but sometimes up to ten cents. There is no standard for how much is added.

      Taxes and local competition are the biggest factors in the difference of prices from state to state, region to region. Stations closer to the oil refineries in the Gulf of Mexico often have lower prices, as well as areas with lower environmental standards.

biz.yahoo.com Press Release Source: NATSO Thursday March 6, 1:05 pm ET

ALEXANDRIA, Va., March 6 /PRNewswire/ -- In response to charges by the American Trucking Associations (ATA) of possible fuel price gouging by retailers, NATSO (representing America's travel plazas and truckstops) President & CEO William D. Fay delivered the following letter to ATA President & CEO William Graves and state attorneys general:

"It is sad that the trucking industry has decided to ignore the geopolitical factors that have sent crude oil prices skyrocketing and instead point fingers at a trucking community partner, America's truckstops.

Throughout the decades, crude oil prices go up and diesel prices go up. Then the price of crude goes down and diesel prices go down. Although we never hear mea culpas after prices go down, users are unfortunately wont to seek out scapegoats when prices shoot up.

Here are some facts that Attorneys-General and the trucking industry should heed:

* Crude oil prices are hovering at two-year highs.  A barrel of crude
  today sells at $36, double the $18 price just a year ago.

* Worldwide crude oil supplies are tight because of uncertainty about Iraq
  specifically, the Middle East generally, the Venezuela strike, and cold
  weather.

* Little needs to be said about the Middle East and Venezuela, but it's
  important to note that home heating oil and diesel fuel for trucks come
  from the same source.  This winter has been 30% colder than 2002.
  January in the Northeast was 32% colder than last year and February has
  followed this freezing trend.  As a result, the demand for heating oil
  was up dramatically -- this, in turn, puts upward price pressure on the
  distillates that also produce diesel.

On behalf of the nation's truckstops and travel plazas, NATSO welcomes any investigation by attorneys general, but remind them that there have been myriad investigations over the last several decades. Not one single investigation has ever turned up evidence of gouging or price-fixing.

We'll watch with bated breath for the trucking industry's mea culpa when the weather turns warmer and the war and political instability in Venezuela ends."

NATSO is the professional association of America's $42 billion travel plaza and truckstop industry. Founded in 1960, NATSO represents the industry on legislative and regulatory matters; serves as the official source of information on the diverse travel plaza and truckstop industry; provides education to its members; conducts an annual convention and trade show; and supports efforts to generally improve the business climate in which its members operate.

Source: NATSO

reuters.com Thu March 6, 2003 07:12 AM ET By Tom Ashby

LONDON (Reuters) - World oil prices rose toward historical highs on Thursday as the United States suggested that Iraq may have only days to decide to disarm or face war.

Futures traders fear an attack on the world's eighth largest oil exporter could trigger a supply shock at a time when global inventories are at historical lows.

International benchmark Brent crude oil rose 55 cents to $33.55 per barrel, just 40 cents below a two-year high hit last week. U.S. crude, which hit a 12-year high around $40 last week, was 31 cents higher at $37.00.

"There are certainly a lot of people who think the likelihood of a military operation before the end of March is high," said Adam Sieminski of Deutsche Bank investment bank.

Secretary of State Colin Powell sought to blunt opposition to war by arguing that Iraqi President Saddam Hussein had not made a decision to disarm.

"Nothing we have seen... indicates that Saddam Hussein has taken the strategic and political decision to disarm," he said in a speech on Wednesday.

"We will see in the next few days whether or not he understands the situation he is in and he makes that choice."

Chief United Nations weapons inspector Hans Blix is due to deliver his next report on Friday, and the United States wants the Security Council to vote on a war mandate next week.

POWELL CONTRASTS WITH BLIX

Powell's harsh assessment of Iraqi cooperation contrasted with comments by Blix, who said Iraq had stepped up disarmament recently.

Blix said he would release "benchmarks" for disarmament on Friday, but Powell resisted the idea saying: "We've given him enough measures... I think we can pretty much judge now that he is not complying."

Washington and London have about 300,000 troops in the Gulf ready to attack Iraq for allegedly hiding programs to develop nuclear, biological and chemical weapons.

The threat to Gulf oil supplies comes at a time when global oil stocks have slumped below normal levels because of a prolonged strike in exporter Venezuela, and an unusually cold winter in the northern hemisphere.

Latest U.S. government data show stocks of distillates, including heating oil, falling to the lowest level since 1963 on strong winter demand.

Crude stocks in the world's largest consumer are already at their lowest in 27 years.

Fears of war and a supply crunch have sent world oil prices up by a third in the last three months, driving up energy costs at a time of fragile growth in many rich economies.

The Organization for Economic Cooperation and Development, which represents most major industrialized nations, said on Thursday the world economy would be hit if the Iraq crisis led to a sustained period of high oil prices.

The Organization of the Petroleum Exporting Countries, which controls two-thirds of world exports, has pledged to fill any shortfall should war disrupt supplies from Iraq, which now sells around two million barrels daily.

But industry analysts say OPEC may not have enough to cover if war on Iraq also affects supplies from other Gulf countries, and importing countries may have to fall back on their huge emergency stockpiles to fill the gap.

www.bayarea.com Posted on Thu, Mar. 06, 2003 By Peter Behr WASHINGTON POST

WASHINGTON - The Bush administration's decision to buy oil for the nation's strategic petroleum reserve last year, as oil prices were climbing, raised U.S. energy costs without significantly improving the nation's energy security, a report by Senate Democrats said Wednesday.

Although the administration added 41 million barrels of oil last year to the reserve, kept in salt domes along the Gulf of Mexico, U.S. energy companies cut back comparably on their own inventories, resulting in no net increase in nationwide oil supplies, said the report by the Democratic staff of the Senate Permanent Subcommittee on Investigations.

The strategy "appears to have backfired," said Sen. Carl Levin, D-Mich., the subcommittee's top-ranking Democrat. His staff's 268-page report on the strategic oil reserve follows a year-long inquiry, most of it done while Levin was the subcommittee's chairman.

Energy Secretary Spencer Abraham rejected the report's conclusions, saying he did not believe the U.S. strategy affected prices.

Some industry analysts challenged the report's conclusion, saying the escalating tensions over Iraq created a strong reason for increasing the oil stockpile.

"If things go horribly wrong in the (Persian) Gulf, it means they have a bit more of an insurance policy," said George Beranek, manager of market analysis with PFC Energy in Washington, D.C.

"With the current Iraqi situation, the value of the strategic petroleum reserve is priceless," said Adam Sieminski, an energy analyst with Deutsche Bank in London. Once a decision has been made to buy oil for the reserve, it's hard to know what is the "right" price, he said.

The administration's error is in failing to use the oil stockpiles now, he said, to increase supplies and lower current oil prices, which have risen by more than 60 percent over the past year. "They keep waiting for some sign from heaven," he said.

In November 2001, President Bush set a goal of increasing the reserve from about 550 million barrels to its full capacity of 700 million barrels, about a 45-day supply. Before that, the Energy Department had deferred purchases for the reserve when prices were moving higher.

Abraham said Wednesday the administration is monitoring the oil supply situation "very closely" but does not intend to use the reserve to restrain price increases. It would be used if a war with Iraq cut seriously into oil supplies.

The administration has been postponing purchases for the reserve since mid-December, a move that Levin's staff said supports its claim that the old Energy Department policy was correct.

Beranek said the report was wrong in concluding that oil companies refrained from increasing their crude oil inventories because the administration was filling the petroleum reserve.

As oil prices rose in 2002, energy company executives were feeling pressure to cut operating costs, and that led to their shrinking inventories, he said.

The committee's analysis also underestimates the impact on inventories of production cutbacks early in 2002 by the Organization of Petroleum Exporting Countries, and the sharp drop in oil imports late last year when Venezuela's oil fields were closed by a national strike, he added.

"I don't think somebody at Exxon is saying, 'DOE has more oil, so we need less,'" Beranek said.

Levin's report also said it looked into the possibility that prices of North Sea oil bought for the reserve were manipulated, but could not prove it, because of the large volumes of oil traded on unregulated over-the-counter energy markets.

The risk was disputed by Neal Wolkoff, executive vice president of the New York Mercantile Exchange, the primary regulated market for energy trades.

"I'm not saying that a market absolutely can't be manipulated," Wolkoff said. "But if anyone does try to manipulate the (oil) market, we have the power to investigate and punish it." The exchange "takes that responsibility seriously."

Wolkoff said that despite the oil market's volatility there are many competing traders. "I don't see anything unusual. I don't see any dominant positions."

www.zwire.com By: GREG JUNEK, Business Editor March 05, 2003

East Texans can expect gasoline prices to remain higher than they were several months ago - even if a war campaign in Iraq is successful, a college department chairman who follows the energy market said Wednesday.

Ashton Oravetz III, Tyler Junior College chairman of business administration, said the strike in Venezuela and resulting shutdown of its wells probably permanently hurt that country's oil production.

Also, not much crude is in storage, so changes in crude oil prices are reflected quickly in gasoline prices.

"It all comes down to Venezuela," Oravetz said. "We're probably going to hit Iraq next week or the week after. There's no gouging that I can see; (the price at the pump) is just based on crude oil prices."

West Texas Intermediate Crude and IPE Brent Crude have been running around $33-$34 per barrel, and Oravetz said he does not believe crude prices will be lower than $25-$28 a barrel for a long time.

"I don't think we're going to have a big dropoff. We're going to get rid of the war premium in there," he said. "Right now, gasoline prices could go up 10 cents next week on the war premium."

But in the near term, a person should not look for gasoline prices less than about $1.30 per gallon, even if the Iraq situation ends well, Oravetz said.

Tyler stations on Wednesday said they had seen some increases and some decreases in the price per gallon of their gasoline grades.

A clerk at Food-Fast Convenience Store No. 55, 5502 Old Bullard Road, said the price of unleaded plus dropped two cents, to $1.61 per gallon, and premium unleaded dropped from $1.71 per gallon to $1.67 per gallon in the last couple of days. Unleaded gasoline stayed the same at $1.55 per gallon.

All prices exclude the nine-tenths of a cent tacked onto every gallon.

Kirby Food No. 2, 4833 Troup Highway, reported no change in the last couple of days, with unleaded at $1.55 per gallon, unleaded plus $1.65 per gallon and premium unleaded at $1.75 per gallon.

Kidd Jones, 11421 Texas Highway 64 West, was selling regular unleaded gasoline Wednesday for $1.51 per gallon. The clerk said the price on that grade dropped two cents Tuesday morning. Super unleaded, however, rose two cents to $1.67 per gallon.

Oravetz said he doubts Venezuelan production will get back to where it was prior to the strike. Wells were turned off and many wells in Venezuela are older wells that produce heavy oil, and one cannot just turn a well on and off.

"They have to be taken care of, they have to have treatments to keep them producing, and when you shut them in you do permanent damage to the well bore and the reservoir," he said. "I think there could be a permanent reduction in Venezuela, which affects the world supply of oil."

Also, some wells in Iraq are not in good condition. Even if the Iraqis do not destroy their wells in war time, it will take a lot of investment to improve their production, Oravetz said.

He added China is a country that has, in the last few years, begun importing its own oil, which taps into the supplies other countries have been using.

Greg Junek is Business editor. He can be reached at 903.596.6280. e-mail: business@tylerpaper.com