www.presstelegram.com214741198150,00.html Article Last Updated: Saturday, February 22, 2003 - 8:04:09 PM PST By Andrew Blazier, Staff writer

Bolstered by consumer fears of a looming war with Iraq and national and global supply shortages, gas prices statewide are surging even higher.

Prices hovered anywhere from $1.90 to $2 per gallon Saturday at many Long Beach area stations.

A gallon of regular unleaded self-serve gasoline cost Californians $1.93 on average the highest in the nation. Drivers in the Los Angeles area paid an average of $1.89 for regular unleaded, up 25 cents from the previous month and 59 cents from February 2002, according to the Auto Club of Southern California.

"It's ridiculous,' said John Flores, 18, of Covina, after spending $1.82 per gallon at an ARCO. "You put in $5 and you barely get two gallons.'

He said it would cost him $40 to fill up his Mitsubishi Montero Sport.

A man who buys bulk fuels for Cosby Oil Co. in Santa Fe Springs said prices are bound to go even higher.

"Everything's kind of changing for the worse for the consumer,' Bob van der Valk said. "I see it shooting right by $2. We won't even blink an eye this time.'

Worried the global supply of crude oil might fall quickly if the country goes to war, the nation's oil companies bought up existing supplies rapidly. The hurried buying has driven crude prices up 19 percent since the start of the year to $36.79 per barrel.

About 40 percent of the retail cost of gasoline is attributed to the price of crude oil, according to John Cogan, energy information specialist for the Energy Information Administration in Washington, D.C.

Alaska North Slope crude, which makes up 20 percent of California's supply, reached $36.81 per barrel this week, up from $30.55 per barrel on Jan. 2, according to the California Energy Commission in Sacramento.

Besides war, global supply has been hurt by a two-month oilworkers' strike in Venezuela and a minor strike in Nigeria.

Within California, oil supplies have dropped about 6 percent, as refineries transition from fuel containing additive MTBE to fuel that uses cleaner-burning ethanol instead, van der Valk said. The majority of the state's gas companies plan to begin the switch by March 15, which could affect prices until October, when supplies return to normal.

"In our industry, it seems like bad news comes in threes,' he said. "You've got a recipe for disaster.'

Oil supplies weren't helped Friday. A massive explosion at an ExxonMobil Corp. oil storage facility in Staten Island, N.Y., pushed crude oil prices up more than a dollar in trading Friday. Heating oil and gasoline futures also surged.

"The most important factor is the price of crude oil on the world market,' said Rob Schlichting a commission spokesman. "That's a direct result of war fears and the country's Mideast policy.'

www.wisinfo.com Posted Feb. 22, 2003 By Steve Wideman Post-Crescent staff writer

APPLETON — Glenn Adams filled up his Jeep Cherokee with gasoline Friday, and he wasn’t happy about it.

“Right now somebody is pocketing a lot of money,” said Adams, of Appleton, while at the BP Amoco station, 911 W. College Ave.

“It seems like everything was OK for a while until talk started of war with Iraq. I’d like to know the reasoning behind raising gas prices.”

Most area gasoline stations are selling a gallon of regular, unleaded gasoline for $1.749 after a week in which prices rose a dime or more. But while area gas prices stabilized this week, motorists shouldn’t expect a significant downward trend anytime soon, a travel industry analyst said.

“There is no way of predicting what is going to happen,” said Michael Bie of AAA Wisconsin. “Thursday was the first day in two weeks prices didn’t creep up. I couldn’t begin to guess why prices have stabilized at this point.”

The threat of war with Iraq, a general strike in Venezuela and short supplies of finished petroleum products are all being blamed for the most recent price increases, according the U.S. Department of Energy.

U.S. Sen. Herb Kohl asked the Federal Trade Commission on Friday to monitor gas prices in the Midwest, saying consumers “are entitled to know whether they are being subjected to anticompetitive and anti-consumer practices.”

Kamaljit Singh, a manager at BP Amoco, said retailers are not responsible for the price increases, but only increase prices to keep up with jumps in wholesale costs.

“Everyone is saying gasoline is too expensive. The last couple of weeks it increased 10 to 15 cents a gallon,” Singh said. “We don’t make much money on a gallon of gas.”

The price of diesel fuel is affecting the trucking industry, said John Wilkinson, president of Wisconsin Paper Group, a Neenah-based shipping association.

“Diesel fuel is at an all-time high. The DOE said the nationwide average for diesel is a little over $1.70,” Wilkinson said. “It’s becoming more expensive to do business.”

Wilkinson said many carriers have imposed fuel surcharges on shipments.

“Sometimes the surcharge is buried in the rate charged per mile. Sometimes it is a totally separate charge,” he said.

He said the higher fuel costs are making an economically difficult situation “harder yet, because the economy is still pretty flat.”

Bie said gasoline prices began to increase in mid-January when cold weather hit the northeast United States and the most severe spikes came in the two weeks following president Bush’s State of the Union message.

“That’s when consumers began having problems with exorbitant price increases that went up simply on the fear something might happen with Iraq,” he said.

Bie noted that the 1991 Persian Gulf War produced slow, but steady price increases leading up to Operation Desert Storm.

Because the 1991 conflict was short-lived, wholesale and retail prices dropped dramatically.

The day after the U.S. launched its 1991 attack on Iraq, the price of crude oil had its largest one-day plunge in the history of the New York Mercantile Exchange from $32 to $21.45 a barrel.

“Hopefully that scenario would play out again if there is a quick resolution to this conflict, but there is no guarantee,” Bie said.

Steve Wideman can be reached at 920-993-1000, ext. 302 or by e-mail at swideman@ posstcrescent.com.

www.newsday.com By ALICIA CHANG Associated Press Writer

February 22, 2003, 2:02 PM EST ALBANY, N.Y. -- From Albany to Buffalo, motorists are feeling the unwelcome pinch in their wallets as gasoline prices at the pumps continue their spike in recent weeks. Motorists' loss could be New York's gain. The state could receive a surge in revenues if the cost of gas and diesel fuel maintains this trend because the state charges 4 percent sales tax on gas sales, or 8 cents a gallon if the average price of motor fuel reaches $2 a gallon. On a 10-gallon fill-up, that could be a tidy 80 cents for the state. Analysts blame the price hike on tensions in the Middle East and a strike in Venezuela that has crippled that nation's petroleum industry. This turmoil is potentially good news for New York state, which is struggling to plug an $11.5 billion hole in its budget over the next 13 months. Even without the price surge for most of this fiscal year, the state expects to raise more than $500 million from its motor fuel tax. But while prices at the gas pump might inject much-needed revenues into state coffers, the harsh winter New York is suffering through is increasing the cost to the state to heat its buildings. So far this winter, the state has spent $3.82 million alone to heat the state Capitol and the sprawling Empire State Plaza complex in Albany where 16,000 state employees report to work. That's an increase of more than 50 percent compared to the same period last year, when the state spent $2.13 million. "Because of the colder temperatures and the longer winter that we're experiencing, our costs this winter are higher because of the increased demand for fuel," said Jennifer Meicht of the Office of General Services. The state heats its buildings with a combination of oil and natural gas, depending on price and supply and demand. Last winter, the state used only gas, which is environmentally cleaner and cheaper, to heat buildings. This month, the state paid $1.12 a gallon for heating oil, up from 89 cents in October 2002. Last week, the U.S. Energy Department, citing low stocks _ as well as higher natural gas prices _ said heating bills could be 50 percent higher this year than last winter. If the cold winter persists, refiners will need to keep up the heating oil supply and postpone their push to making gasoline. If so, gasoline inventories may not recover, leading to higher gas prices this spring and summer, analysts said. Across New York, gas prices have reached record highs. In the Albany area, the average price for a gallon of regular, unleaded gas Saturday was $1.70, up from $1.16 a year ago, according to the American Automobile Association. In Buffalo, it was $1.74 a gallon, up from $1.17 a year ago. In New York City, it was $1.81 a gallon, up from $1.29 a year ago. The Pataki administration disputes that the state benefits from higher gas prices at the expense of motorists. Officials contend that drivers tend to purchase less gas as prices skyrocket, essentially offsetting a revenue surge when gas prices spike. Robert Sinclair Jr., a spokesman for the American Automobile Association of New York, disagreed. He said that contrary to popular belief, people don't buy less gas when prices are expensive but rather shop around or cut back on nonessential driving. "In the United States, we are tied to our vehicles so folks don't have a choice," Sinclair said. Under a special contract, the state, which maintains a fleet of 12,823 vehicles, currently pays 98 cents a gallon for gas compared with 66 cents a gallon a year ago, Meicht said. Of that fleet, 20 percent use alternative fuel such as electric and ethanol and are not subject to gas price fluctuations. It was not immediately clear how the soaring prices have affected the state's fleet, she said. During the last gas price hike in summer 2000, Republican Senate Majority Leader Joseph Bruno proposed to permanently repeal the motor fuel tax in order to give motorists a financial break while Democratic Assembly Speaker Sheldon Silver favored a two-month suspension of the gas tax. Neither proposal passed. Given the climate of the state's fiscal problems, it's unlikely any state leader will suggest giving back any surge it gets in gas tax revenues in 2003. Earlier this month, New York U.S. Sen. Charles Schumer asked the Federal Trade Commission to launch an investigation into the rising gas prices in order to determine whether there was evidence of price gouging.

www.newsday.com By James Bernstein STAFF WRITER

February 22, 2003 Motorists and homeowners, already paying some of the highest prices for gasoline and heating oil in years, are expected to be hit in the wallet even harder after Friday's barge explosion off Staten Island, energy industry experts said. Home heating oil prices may rise 5 cents a gallon, and gasoline 3 cents to 5 cents, in the next few days, analysts said. Some heating oil dealers on Long Island said they already had been notified of increases. "Right now, because supplies are so tight, even a minor disruption can cause a price rise," said Phil Flynn, senior energy trader at Alaron Trading Corp. in Chicago. "This should serve as a big wake-up call as to how tight supplies are." Crude oil prices shot up after the explosion but leveled off, with oil for April delivery closing at $35.58 a barrel, up 84 cents, on the New York Mercantile Exchange. Gasoline futures for March delivery rose 4.67 cents to $1.0125 a gallon and March heating oil futures gained 4.93 cents to $1.108 a gallon. Flynn said the U.S. oil supply is currently at about 268 million barrels, the lowest since 1975. That does not include the approximately 570 million barrels in the U.S. Strategic Petroleum Reserve, which the government so far has declined to tap. Flynn said about 50 percent of the oil used in the New York area passes through the Arthur Kill, the waterway between Staten Island and New Jersey that was closed after the explosion at an Exxon Mobil terminal. John Nuzzi, owner of Nuzzi Fuel Oil Co. in New Hyde Park, said he was notified at 2 p.m. by a wholesaler of a 5-cent-a-gallon price rise. "This is a gasoline fire [on Staten Island] but all markets are affected," said Nuzzi, whose company has 3,000 customers. "It's a knee-jerk reaction." Nuzzi said he believed prices would fall again by early next week. Other experts said they were not so certain. Oil prices are up almost 18 percent so far this year in anticipation of a U.S.-led war against Iraq, a strike in Venezuela and the tight supply situation.

heraldnet.com By Eric Fetters Herald Writer

Gas prices are shooting up in Lake Stevens as fast as they are in the rest of the country. A gallon of premium costs $1.99 9/10 at this Texaco station.

Brian Elliot was blunt about rising fuel prices after filling up his pickup Friday at a Monroe gas station.

"I think it's out-and-out gouging," he said after paying $1.70 a gallon for diesel fuel.

Marysville resident Colleen Weston said she's also had enough. On Thursday morning, she bypassed her local station, thinking she'd fill up on the way home from work.

When she stopped by that evening nine hours later, the price had jumped 5 cents a gallon.

The latest prices

HeraldNet.com is cooperating with gasbuddy.com on a new site that tracks gas prices in Snohomish County. Check it out at www.heraldnet.com/gasprices.

"It's pretty incredible," Weston said.

To limit the bite of higher gas prices on their household budget, she and her husband have adjusted their shifts in order to carpool to their jobs in south Everett.

Snohomish and Island counties have joined the growing list of places across the nation where paying $2 or more for a gallon of gasoline is no longer just a bad dream. On Friday, a Texaco station near Lake Stevens and a Chevron station near Maltby were among those charging $2-- more precisely, $1.99 9/10 -- for a gallon of premium unleaded.

The average price per gallon for regular unleaded reached $1.73 in the Seattle-Bellevue-Everett market Friday morning, according to an AAA survey. That was 7 cents above the national average.

More shocking is how fast prices rose to that level. Just a month ago, the local average was $1.41 a gallon. In early January, many stations around Everett were selling fuel for $1.30 a gallon or less.

Compare that to prices Friday, when finding any local station charging below $1.60 for a gallon of regular unleaded was difficult. An Arco station on Evergreen Way at Pecks Drive in Everett was charging just below $1.62 for a gallon, but most stations were at $1.66 to $1.70 a gallon.

Outside Everett and Lynnwood, many stations posted prices above that range, with a growing number charging $1.80 or more for regular unleaded.

All this is happening at a time of year when fuel prices usually bottom out before rising as summer, the year's busiest driving season, approaches.

Randy Schatz, owner of Randy's Better 76 in Mill Creek, said his regular customers are grumbling but still buying.

"They don't like it, but they understand," he said.

Prices at his station rose 3 cents a gallon Friday to $1.78. But as an independent owner competing against corporate-owned stations, Schatz said that he's not getting rich off the increases.

"In just the past week, it's been a dime increase per gallon in the wholesale price I pay," he said.

The higher retail prices also have increased the transaction surcharges Schatz pays whenever a customer buys gas with a credit card.

At corporate-owned service stations, which are now the majority in most urban areas, local managers usually have little control over prices. They normally charge what their owners, the big oil companies, tell them to charge.

The oil companies deny price-gouging accusations leveled this week by AAA and some members of Congress, saying market factors are to blame. Those include Venezuela's reduced oil production in the wake of nationwide strikes there, worry about the impact of a possible war with Iraq and relatively low reserve supplies held by the United States.

Just as crude oil prices showed signs of easing after reaching a two-year high on Thursday, an accident caused an explosion and fire at an oil terminal in New York. That sent crude oil up again, ending the day at more than $35 a barrel.

Schatz said those conditions explain why prices are rising in general, but he agrees with many of his customers that there's no good reason the prices are going up so high. Meanwhile, he joked that he is ordering more numeral 2s for the sign outside his station in preparation for prices of $2 and up.

Back at the 76 station in Monroe, Elliot, who is self-employed, said there's not much he can do about the rising prices or how much he drives.

"I still have to go to work," he said with a shrug.

Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.