www.usatoday.com Posted 3/3/2003 11:16 PM By Barbara Hagenbaugh, USA TODAY

WASHINGTON — As gasoline prices soar, service station owners say they are seeing an increase in the number of drivers who are skipping out on the bill.

Last week, a Shell gas station clerk in New Port Richey, Fla., was injured after he grabbed onto a car door to stop a motorist who was running out on a $16 bill. Karam Zaki, 34, was dragged 450 feet while being kicked by the driver before swinging off the car. The driver has not been caught. (Related story: Gas goes above $2 a gallon in Calif.)

Case Marshall, owner of 16 Pit Stop Convenience Stores in upstate New York, says he has seen a rise in "drive offs," but the increase has been nowhere near as steep as it was in 2001, when gas prices were also elevated. That's perhaps in part because of steps he's taken to thwart thieves, including requiring cashiers to turn on the pump every time a new driver shows up. Recent numbers are not available, but pump-and-runs cost owners more than $1,000 per station in 2001, according to the National Association of Convenience Stores — costing the industry more than $100 million.

Station owners say they always see an increase in gas theft when prices are high. While some drivers may be squeezed so tight they can't afford the higher gas costs, owners say others, thinking gas sellers are jacking up prices unfairly, may be taking it out on them. Some elected officials and AAA have questioned if there is price gouging going on, a claim station owners angrily reject.

"Everybody wants to blame us," says Bill Douglass, who owns 10 Lone Star convenience stores in Texas.

"There's a perception out there that when the price of gasoline goes up, we're just making that much more money," says Jim Tudor, president of the Georgia Association of Convenience Stores. "That's nowhere near the truth."

Retailers say they have not raised prices as quickly as their gas costs have increased. Prices have gained over the past several months as the cost of crude oil, which accounts for half of the cost of gasoline, has skyrocketed because of worries about a war with Iraq, a strike in oil-producer Venezuela and low supplies. Station owners say after paying for gas, taxes, staff and other costs, they are hardly making money.

To deter theft, some station owners require customers to pay before pumping, and others have installed security cameras. Some states and localities have enacted laws in recent years to increase fines for driving away without paying or allow law enforcement officials to take away drivers' licenses.

www.kesq.com

$1.48 is the average price this week for a gallon of regular gas here in Riverside and San Bernardino counties. Last March, you would have paid a lot less -- $1.38.

Valley gas stations are sporting prices at well over the two-dollar mark. It's the result of Middle East supply concerns, and Venezuela's interrupted oil production, the result of a general strike. Here in the valley, drivers are feeling the pain, especially those who depend on gas for their jobs, and those who drive large vehicles.

"We don't go as much as we'd like to on the weekends because it's $50 to go somewhere plus what you're going to do when you get there," says Palm Desert resident Earlene Thompson.

In northern California, Yreka residents hit the steps of the county courthouse over the weekend. Gasoline is costing them an arm and a leg, so people rallied to vent their frustrations.

Back here in the valley, we did find one driver who says prices are just right. Richard here is visiting from Oxfordshire, England.

"These gas prices are brilliant. Why can't we have these back home where we come from. It'd be superb."

As high as these prices are now, industry analysts don't expect them to remain sky high forever. They expect them to begin falling in April, and be back to normal, about $1.40 on the national average by July, just in time for the peak summer driving season.

Relief can't come soon enough for many drivers, but IFR Pegasus analyst Tim Evans says barring an extended war with Iraq, gas prices will fall along with crude oil prices, as Opec boosts production.

www.nashvillecitypaper.com Commentary by Doron Levin   The prospect of a U.S. war with Iraq is driving up jet-fuel prices, hurting the already weak finances of major U.S. air carriers and spurring them to try their own price increases. Since mid-November, the price of jet fuel has climbed to a peak of more than $1.20 a gallon from about 70 cents, the latest increase reflecting an oil depot fire on Staten Island, N.Y. and strikes in Venezuela. A penny increase in jet fuel costs the U.S. industry $180 million a year. The second-biggest expense after employee costs, higher fuel prices are a heavy burden on the finances of major carriers already weighted down by bloated union contracts and other expenses. It’s hard to determine, though, which is more debilitating: billowing costs or plummeting revenue. The major carriers are conflicted. On one hand they are trying to keep ticket prices affordable to attract travelers back to the skies and from low-cost carriers. On the other hand they are desperate to maintain cash flow and not fall prey to bankruptcy, as UAL Corp., parent of United Airlines Inc., and US Airways Inc. have in recent months. In February, Continental, the fifth-largest U.S. carrier, raised round-trip ticket prices $20, saying the move was designed to mitigate rising fuel prices. American and US Airways Group Inc. quickly matched Continental. Northwest Airlines Corp. decided to match only on some of its lowest fares. Three days later, Continental, American and US Airways, seeing that their increase wasn’t matched fully, restored their earlier fares. Two days after that, ATA Holdings — a low-cost carrier — raised some prices $3 in each direction, a move matched by United, American and Northwest on competing routes. By the end of the month, Northwest, Continental, American and two other majors again raised fares $10 in each direction on many routes, citing rising fuel costs. Whether the latest increase holds likely will depend on passenger traffic. Just as in the automobile business, where overcapacity has caused falling car and truck prices, airline ticket prices suffer because there are too many seats and not enough travelers to fill them. Rising and falling fares are the airlines’ version of appearing and disappearing rebates on cars. Following steady price increases in the 1990s, airline revenue averaged 14.34 cents per mile in 2001, according to the Air Transport Association, a trade group for U.S. carriers. That number fell to 13.12 cents per mile in 2001 and to 11.93 cents last year. The preceding numbers represent revenue to the airlines, not including fees and taxes. If tickets seem as expensive as ever, that may be because they reflect more taxes and fees than ever. In 1972 about 7 percent of the price of a ticket was for tax and airport fees. Twenty years later it was 15 percent; last year it climbed to 26 percent. In other words, now an airline pockets only $149 of $200 in airfare. For the person or business buying the ticket, however, it’s still just expense. “The reason for weak demand isn’t just competition and too much capacity,” said John Heimlich, the trade group’s director of economic and market research. “Tons more people are driving because you can communicate better from cars. Substitutes for meetings like videoconferencing are better than ever.” The major carriers want nothing more than to introduce a broad price increase that travelers will accept, but they seem to differ on how to do it. Northwest, based on its tactics, appears to favor increases mostly on the lowest discount fares, while major competitors try across-the-board raises. Low-cost carriers like JetBlue Airways Corp. insist they are committed to maintaining simplified low fares, despite rising fuel costs. Fuel prices, though troublesome, have been higher. Prior to the Persian Gulf War in 1991, jet fuel prices peaked above $1.40 a gallon; within a year they had returned to the neighborhood of 70 cents a gallon. It’s a good bet, with economies weak worldwide, that a short conflict in Iraq will be followed by falling energy prices and some relief for airlines. What’s far less clear is that the major carriers have found a way to price air transportation that keeps them solvent without thoroughly confusing their customers. Doron Levin is a columnist for Bloomberg News. Editor’s Note: Tom Neff is out of town this week. His column will return next week.

www.star.niu.edu By Laura Grandt Staff Reporter

Commuters may have noticed a sharp increase in gas prices in recent months, a trend that is caused by several factors.

The average price of a regular gallon of gas in Illinois was $1.69 on Feb. 28. This is up 19 cents from last month, and 45 cents from a year ago, according to the AAA Web site.

Although the Web site did not offer statistics for DeKalb, it did state that the Rockford average was $1.61. This was up 15 cents from a month ago, and 51 cents from a year ago.

One of the major factors for the increased gas prices is the turbulence in Venezuela, said Ron Planting, manager of information and analysis at the American Petroleum Institute. Workers went from producing three million barrels a day to producing almost none during a recent strike. Although production has resumed in the past three months, the lost oil has not been replenished.

Weather also has been a factor in increased prices. This winter has been colder than normal, raising demand for crude oil, Planting said.

Speculation about war has caused a fluctuation in the price of crude oil as well, said Norma Cooper, manager of community affairs at AAA Chicago Motor Club. Prices often increase because of a fear of interruption in supplies.

A fire in the largest refinery in Indiana most likely helped raise gas prices on a local level as well, Cooper said.

The rises in oil prices don’t only affect motorists. An increase in gas prices has the potential to impact other aspects of the economy. It can raise unemployment and inflation rates, said Carl Campbell, associate professor of economics at NIU.

Increases in unemployment and inflation occurred during the oil price hikes in the late ’70s and early ’80s, and in the early ’90s. Although the increase is fairly recent, and such effects would take time, they are a possible consequence, Campbell said.

An end to the increased gas prices is impossible to predict, Planting said.

“There’s a lot that’s beyond anyone’s control,” Planting said.

Although prices have been uncharacteristically high during the winter months, an increase in price is normal during the shift to summer. This is because of increased demand for gasoline for seasonal vehicles, such as golf carts and for vacations, Cooper said.

www.star.niu.edu By Ken Moritsugu (KRT)

WASHINGTON - While uncertainty about a war against Iraq has contributed to a sudden spike in oil prices, those prices could remain high even if a U.S. invasion achieves quick victory.

And even if crude oil prices fall, gasoline prices likely would remain high at least into late spring, analysts say. It generally takes one to two months for oil price shifts to feed through to gasoline. Any postwar declines could be offset by upward pressure on pump prices as demand picks up with the start of the summer driving season.

The nationwide average price for unleaded regular is $1.67 a gallon, according to the American Automobile Association, 54 cents higher than a year ago.

Natural gas prices also have risen, pushing up heating and electricity costs for many homes and businesses. High energy prices slow economic growth and increase the chances of recession.

"Unless it reverses itself quickly, the energy shock is big enough to threaten the economy," said Richard Berner, the chief domestic economist at the Morgan Stanley investment bank in New York. He put the chance of recession at one in four in a report to clients on Friday. "While it's anyone's guess how long it will last, the fundamentals don't suggest quick relief," he added.

Global Insight Inc., an economic consulting firm in Lexington, Mass., doesn't expect gasoline prices to ease from today's level until July or August at the earliest.

Most analysts attribute part of the rise in oil prices to fears about potential war-related disruptions to oil production. The analysts conclude that a swift and successful war, with minimal damage to oil wells, would eliminate this "war premium" from the price.

Certainly, war rumors have created short-term havoc in oil markets, pushing the price of oil on the New York Mercantile Exchange up to $37.70 a barrel on Wednesday - the highest since the Iraqi invasion of Kuwait in 1990 - before dropping back to close at $36.60 on Friday. A barrel is 42 gallons.

"I call it March missile madness," said Phil Flynn, a futures trader at Alaron Trading in Chicago. He attributed the midweek run-up in oil prices to the market getting "a tad ahead of itself on war concerns."

Yet some economists argue that oil prices would be high today with or without the so-called war premium. They note several other factors, such as low inventories of crude oil, high demand for heating oil because of the cold winter and the disruption of production in Venezuela due to political unrest.

These factors alone are enough to account for much of the 45 percent rise in oil prices from $25 a barrel since November, said Dave Costello, an economist with the federal Energy Information Administration.

Phil Verleger, a California-based energy consultant, doesn't believe the war premium exists at all, so a quick end to a war won't bring down oil prices, he predicted, unless the United States also were to release oil from its Strategic Petroleum Reserve.

One problem: High oil prices, at least for a while, can be a self-sustaining proposition.

The refiners who make gasoline and other oil-based products don't want to stock up on oil while it's so expensive. Any company that buys oil at $37 a barrel would be at a competitive disadvantage if the price drops.

Traders expect prices to fall eventually. Futures contracts for oil for delivery in December closed at under $29 a barrel Friday.

If refiners only buy enough oil to keep going, inventories remain low, which in turn helps keep prices high.

"No one wants to bite the bullet and buy crude, because they're afraid of a price collapse," Verleger said.

If a war were to go badly, oil prices could shoot up instead.

Should the price of crude reach $50 a barrel and remain there for several months, the chances of recession would rise sharply.

© 2003, Knight Ridder/Tribune Information Services.