www.katu.com February 24, 2003

PORTLAND - Gas prices in the Portland area are just two cents away from it's highest ever. Back in the fall of 2000 the cost of regular unleaded shot up to $1.80 a gallon.

The spike in 2000 was after a big refinery fire that affected prices up and down the West Coast. In 2003 there's uncertainty in the Middle East, and labor issues in South America.

But folks KATU spoke with say when prices go up that gas station owners suffer a long with the rest of us.

It costs Tim Secolo 15 cents a gallon to sell gas at his Hillsboro Shell Station.

But when he set's his prices, he has to follow his neighborhood competitors. To meet or beat the competition he sometimes sells fuel at a loss.

"I'm just barely making it as it is. It's tough, it's a tough game. It's tough," says Secolo.

After his competitors, Secolo considers the demographics of his customers. All three stations in the area charge $2.17 a gallon for premium fuel. But Secolo says overhead in Hillsboro is high and his customers are willing to pay it.

One of those customers said "I don't even pay attention, to be honest with you."

Another reason that some neighborhoods are a little more expensive than others are something called zone pricing. For example a chevron station on NE Sandy has no competition. Gas suppliers know that, so they know they can charge the station a little bit more per gallon.

World events are the third factor in gas pricing. The chance of war in Iraq, and an oil field strike in Venezuela are both driving up the cost per barrel.

One place to find lower prices is at stations at grocery stores. Tim Secolo explains that grocery stores use cheap gas as a tool to bring in customers.

"They use gas as a loss leader, they sell it at a loss to get people into their store, and that makes up for what they don't make on the fuel," says Secolo.

Tim Secolo hopes that independent family owned stations like his can survive the higher prices.

Drivers in Washington are also feeling the pinch. They're just three cents away from their all time high price of regular gas. The all-time high was a $1.76 in October of 2000.

Right now the highest price in the country tonight is down in California where they're paying a $1.93 for regular unleaded.

www.thedailyjournal.com Tuesday, February 25, 2003

Ten dollars of gas doesn't go as far as it once did.

That isn't the longing of a veteran driver for the good old days. Anyone who has been driving since last year would have noticed the slow uptick of prices since the start of 2003. The increase, about 22 cents per gallon for unleaded gas nationwide, has been occurring slowly but steadily.

Until now, drivers have had the threat of war, terrorist attacks and blizzards to worry about, and they haven't been complaining too much. But the price increases are discouraging and worrisome. Higher gas and heating oil prices fuel inflation, which won't help an already weak economy get back on track. And with gas prices rising as fast as they are now -- the price is hovering around $1.50 per gallon locally -- drivers are starting to wonder how high they will go if, or when, we attack Iraq.

The main reasons for the increase -- a protracted refinery strike in Venezuela, a major U.S. supplier of petroleum, and tensions about the looming war -- have been cited many times in recent weeks.

But some observers are suggesting that refiners and retailers are once again using these reasons to justify overly large price increases. We hope not. To do so when America is preparing for war would be opportunistic at best and unpatriotic at worst. If some of them are, government officials and consumer groups should crack down on the gougers.

Meanwhile, consumers should find ways to trim their gas expenses. One less ride to Wawa during the day; one less weekly trip to the mall; and how about driving a little slower? All will help reduce your gas bill.

For example, every increment of 5 miles per hour above 60 mph adds 10 cents to your per-gallon cost of gasoline. So keep the pedal off the metal, and you'll see a savings that's worth slowing down for.

www.naplesnews.com Business front | Business archive | help Tuesday, February 25, 2003 By DAVID ROYSE, Associated Press

Charlie Crist, the state's top lawyer, has invited representatives of major oil companies to explain why prices are at an all-time high in Florida

TALLAHASSEE — Attorney General Charlie Crist wants to know why gas prices have spiked to an all-time high in Florida, so he will meet today with representatives of six major oil companies.

Officials from ExxonMobil, BP, ConocoPhillips, Amerada Hess, Marathon Ashland Petroleum, and Chevron Texaco Corp. are expected to meet with Crist individually to discuss the oil industry's role in prices at the pumps.

Crist spokesman Bob Sparks said the companies were voluntarily sending representatives and haven't been subpoenaed.

"We're at record high prices," Sparks said Monday. "General Crist has just invited the representatives of these companies to share their perspective on why this is so."

Crist has also asked the Federal Trade Commission to look into whether Florida gas stations are artificially increasing prices to take advantage of possible war with Iraq. Several gas retailers suggested he should look at the whole industry, not just the stations.

According to the American Automobile Association, Florida's average cost per gallon for regular gasoline on Monday was $1.69, up 19 cents from a month earlier and 56 cents higher than the same time last year. It is the highest average price for gasoline ever in the state.

None of the six companies would comment Monday on what their representatives would tell Crist, although BP spokesman Scott Dean said: "We always cooperate with these requests for information and we're happy to do so."

But a petroleum industry economist said basic economics are at work and that a "perfect storm" of international factors were driving up the price of gasoline, not any kind of gouging or conspiracy by producers.

A two-month national strike in leading oil producer Venezuela, the potential for a strike in Nigeria, a particularly cold winter, a growing economy, and the prospect of war in Iraq all combined to push crude prices up, said John Felmy, chief economist at the American Petroleum Institute.

"This is simply fundamental supply and demand," Felmy said. He said crude oil prices have gone up 29 cents a gallon since November and that gas prices have followed suit, going up about 29 cents a gallon since December. He pointed out that in Florida, the price has actually gone up a little less in that period, about 28 cents a gallon.

"We don't set prices on world markets, the market does," Felmy said. "The cost of producing gasoline has gone up 29 cents a gallon."

www.wreg.com February 24, 2003 By Omari Fleming

Memphis, TN - Prices appear to have hit a plateau, down one cent from Sunday, but still hovering at all time highs. At 1.58 a gallon for regular, the price of petrol in Memphis is near record highs.

"Unfortunately we're seeing some of the highest prices recorded. We're within a half cent of the highs in Memphis," says Jim Lott of AAA.

Some drivers crying highway robbery even gouging. But the experts say the showdown with Saddam, supply disruptions from Venezuela, and brutal winter weather has whipped together what energy traders are calling "The Perfect Storm."

"All of those things coming together this month is what has resulted in the huge price increase in the last six to eight weeks," says Lott.

Memphis' average gas price this time last year 1.07...now it's up to 1.58. The lofty prices injecting pain in the pockets of real estate agent Audrey Wood. "It hurts. I ride round town all time and it hurts to pay high prices," says Wood.

"The war is the 'X' factor so we're just toughening it out right now, " says driver Quincy Turner In addition to the threat of war, energy experts say its simple economics. Oil demand is as high as ever...with supplies at 1975 lows. Demand for membership at wholesalers like Costco also on the rise. Only members can fill-up on Costco gas now about 8-cents below the Memphis average. "The prices are lower and I came from Germantown just to get gas. So you made the crosstown trip? Yeah!," says Wood.

www.stltoday.com By Patrick L. Thimangu Of the Post-Dispatch 02/24/2003 10:45 PM (P-D)

Natural-gas spot prices and futures rose sharply Monday amid fears that bitterly cold weather will raise demand for energy and bite into low gas inventories nationwide.

In the Midwest, average natural-gas spot prices nearly doubled at 16 delivery points surveyed by Bloomberg News, jumping from about $7.92 per million British thermal units to about $15.06. Gas for March delivery closed at $9.14 per million Btu on the New York Mercantile Exchange, the highest price in two years. In St. Louis, Laclede Gas Co. spokesman Rick Hargraves said the futures prices wouldn't affect immediately the utility's 630,000 customers in eastern Missouri. But Laclede likely will raise rates in March - when it's scheduled to make a purchase gas adjustment - if wholesale prices rise, he said.

The purchase gas adjustment reflects the wholesale price of natural gas and is applied to about 70 percent of a customer's bill. Last month, Laclede increased purchase gas adjustment rates from about 44 cents a therm - 100 cubic feet of gas - to 52 cents.

Scott Glaeser, manager of natural-gas supplies and transport at Ameren Energy Fuels &Services, a unit of Ameren Corp., said home-heating rates won't rise immediately. But he, too, warned that prolonged increases in futures eventually would trickle down to the wholesale and retail prices.

Ameren Energy buys natural gas for Ameren Corp.'s subsidiaries: AmerenUE, AmerenCIPS and newly acquired Central Illinois Light Co. The subsidiaries serve about 102,000 natural-gas customers in Missouri and about 408,000 in Illinois.

Glaeser and Hargraves said Laclede and Ameren customers won't be affected immediately by rising futures prices because both utilities have ample supplies in storage, bought during the summer months. Also, the companies have hedged gas purchases against higher wholesale prices.

But even without any rate increases, natural-gas customers at Laclede, Ameren and most of the Midwest likely will see high heating bills. The winter so far has been about 32 percent colder than last year, which was the third warmest winter in Missouri history. The National Weather Service forecast that temperatures in St. Louis would fall to 2 degrees Monday. Normally, average temperatures this time of year are a high of 48 degrees and a low of 30 degrees.

The cold weather along with fears of war with Iraq and the political and labor problems in Venezuela, a major oil producer, are pressuring energy prices in general, Glaeser said.

Propane from the terminal at Mont Belvieu, Texas, rose 5.5 cents, or 7.5 percent, to 78.75 cents a gallon Monday, the highest price since 2001, according to Bloomberg News. Heating oil for March rose 3.82 cents, or 3.5 percent, to $1.1467 a gallon in New York, the highest price since December 1979.

The energy increases came as the latest data from the Energy Information Administration showed the nation's natural-gas inventories were about 27 percent below the five-year average and 42 percent below last year.

Kate Warne, senior energy analyst at Edward Jones in Des Peres, said the combination of very cold weather and low inventories triggered high prices Monday.

"Normally, by the end of February the weather is not expected to go into the single digits in St. Louis," Warne said. "What's surprising is that it's this cold at this time of the season."

Another cause of higher prices: Natural gas production in the United States has been falling in recent years, Warne said. Old natural-gas wells are running low, and few new ones are being drilled, she said.

"Longer term, we will see higher prices. I think the era of very low gas prices is probably behind us, because the industry hasn't found a lot of new sources, they have not done a lot of drilling," Warne said.

Besides driving up demand, the colder weather also is hurting gas-drilling operations in some states, such as Oklahoma and Kansas. Ice and snow on the ground are making extraction of gas difficult, Glaeser said.

Bloomberg News contributed to this report.

Reporter Patrick L. Thimangu: E-mail: pthimangu@post-dispatch.com Phone: 314-340-8320