By GENE ZALESKI, T&D Staff Writer

All time record level gasoline prices averaging roughly $1.52 a gallon in Orangeburg and throughout The Times and Democrat Region have arrived. And the general consensus among the experts is they are here to stay, at least through the immediate future. "The threat (of war) is causing an artificial increase up the ladder," said Brad McCully, Bamberg's Brabham Oil Co. spokesman. "The futures traders have driven up the cost in anticipation of future things that no one knows will happen." The uncertainty of the situation, McCully said, has been the primary factor in the high prices. Gasoline supply has actually improved as less and less people are traveling due to a combination of both high prices and heavy snowfall in the Northeast.

McCully said the only expectations on seeing any greater increase is if the United States goes to war, and then the Orangeburg area may see prices in the $1.70 range. "This would be extremely short term," McCully said. How about prices for the summer driving season? "It depends where the war falls in," McCully said. "It is hard to put a finger on ... how the disruption will be in the supply line during the war. Some stuff we just don't know. We just have to wait and see." While prices have shot up an average of 8 cents a gallon over the past two weeks, the week of Feb. 12-19, actually saw prices level out. In Wednesday's survey of selected stations throughout The T&D Region, the least-expensive gasoline found sold for $1.479 at the Shell E-Z Shop at U.S. 21 and Highway 22, near Interstate 26 exit 139. At Santee, gasoline sold for $1.489 a gallon for regular unleaded at the Horizon E-Z Shop on Highway 6. In Orangeburg, the least-expensive sold at the Hot Spot on John C. Calhoun Drive for $1.499. Fogle's Piggly Wiggly in Neeses, Holly Hill's Amoco Food Mart on Old State Road also sold for $1.499. The most expensive gasoline of stations surveyed sold in Bamberg and Branchville for $1.579. AAA Carolinas, an affiliate of the American Automobile Association, reported the gasoline price average of $1.591 is the highest recorded by the organization over the past 20 years. The previous record was set in May 2001 when the average price in the state was $1.535 primarily due to reformulated gasoline. And David Parsons, AAA Carolinas president, does not see this changing any time in the near future. "We expect prices to continue to increase and set new records," Parsons said. "We urge everyone to search your area for the lowest pump price, look for ways to cut down on fuel consumption and keep your vehicle properly maintained to increase its fuel economy." As prices continue to spike -- since the middle of January the national average has increased 14.7 cents to $1.618 per gallon -- AAA officials continue to urge gasoline wholesalers and retailers to show restraint in the pricing of their products, and AAA has already cautioned the industry not to take advantage of the nation's heightened terrorist alert status. The organization has stood by the claim that while the nation continues to experience the loss of oil and gasoline imports from Venezuela and recovers from the recent cold snap, nothing justifies the dramatic increase in gasoline prices experienced across the states. Tom Crosby, AAA Carolinas vice president of communications, said while prices here appear to be rising quickly, it is a case of many "taking profits early" before things get much worse. Evidence of price-gouging has not been seen. "They (prices) are awfully high," Crosby said, citing that they could continue to inch upward as long as the Venezuelan situation remains chaotic, the Organization of Petroleum Exporting Countries continues with current production output and war jitters remain. Assessing how high they will in fact reach, Crosby said it is too premature to speculate on a peak. "Once we engage in war ... it will shoot up and then take some time to go back to normal," Crosby said. Traders are feeling the jitters as well. Crude oil futures settled Tuesday at a fresh 29-month high, up 16 cents to $36.96 a barrel on the New York Mercantile Exchange, marking the fifth increase in as many days. "I don't believe crude's move to the upside is over yet," said Peter Beutel, an analyst for Cameron Hanover Inc. in Connecticut. "Where the price goes is less a matter of any absolute number than a matter of time. The longer we wait, the longer we may keep seeing prices going up. It's a bubble that keeps on expanding until we see something that's going to pop it." As crude reacts to ongoing concerns about tight oil supplies in the event of a war with Iraq, the bearish effects of a Northeast snowstorm drove gasoline lower. Since many people won't be driving in the poor weather, gasoline use is expected to be weak, one analyst said. The March gasoline contract fell 2.78 cents to settle at 99.45 cents a gallon, while March heating oil rose 0.47 cent to settle at $1.0654 cents a gallon. As The T&D continues its weekly gas survey, we encourage readers to get involved. If you know of a gasoline price consistently lower than those in our survey, let us know by e-mail at news@timesanddemocrat.com, by fax at 803-533-5595 or by phone at 803-534-1060. The prices must be consistently low for inclusion in the survey. Here are some of the prices found in the survey conducted Wednesday, Feb. 19: Orangeburg -- Hot Spot on Calhoun Drive: regular unleaded, $1.499. -- Horizon E-Z Shop, Old St. Matthews Road: regular unleaded, $1.519. -- Li'l Cricket at U.S. 301 and Highway 70: regular unleaded, $1.519. -- Henry's on U.S. 301: regular unleaded, $1.519. -- Dodges Store at U.S. 301 and Cannon Bridge Road: regular unleaded, $1.519. -- Horizon E-Z Shop, Shillings Bridge Road: regular unleaded, $1.519. -- Gazbah Exxon, Chestnut and Ellis: regular unleaded, $1.539. -- Short Stop, Magnolia and U.S. 178: regular unleaded, $1.539. -- Big D's Shell, Magnolia Street and U.S. 178: regular unleaded, $1.539. -- Citgo, Charleston Highway: regular unleaded, $1.549. -- Speedway, at U.S. 21 and the U.S. 21 Bypass: regular unleaded, $1.549. Neeses -- Fogle's Piggly Wiggly, Highway 4 and U.S. 321: regular unleaded, $1.499. Bamberg -- 3-Way Food Mart, Main Highway: regular unleaded, $1.579. -- Horizon E-Z Shop West, U.S. 78 West: regular unleaded, $1.579. -- Horizon E-Z Shop on U.S. 301 South: regular unleaded, $1.579. Branchville -- Horizon E-Z Shop, Freedom Road: regular unleaded, $1.579. Holly Hill -- Amoco Food Mart, Old State Road: regular unleaded, $1.499. Santee -- Horizon E-Z Shop, Highway 6: regular unleaded, $1.489. St. George -- Fast Point Food Store, on Highway 78 and Sears Street: regular unleaded, $1.529. St. Matthews -- Amoco, Highway 6: regular unleaded, $1.529. T&D Staff Writer Gene Zaleski can be reached by e-mail at gzaleski@timesanddemocrat.com or by phone at 803-533-5551.

abcnews.go.com The Associated Press Feb. 20 —

The middle of winter feels more like the heart of summer at gas stations nationwide, as fuel prices surge past $2 a gallon in some places and motorists grumble about being gouged.

When a gallon of gas costs more than a cup of gourmet coffee around the July 4 holiday, drivers chalk it up to industry greed during the peak driving season. Now consumers are accusing oil companies of taking advantage of the prospect of war in Iraq an allegation the industry brushes aside as a conspiracy theory.

Gas station owners tell a more complicated story, explaining that today's high pump prices are partly the result of avarice, but not their own.

The average retail price of regular unleaded has risen 22 cents since the beginning of the year to $1.66 a gallon. Meanwhile, wholesale prices paid by marketers have increased only 14 cents.

While suppliers tack on costs for additives and transportation, the disparity is the source of ire for much of the public, and some consumers suspect oil companies are trying to cash in on market uncertainties.

"This is ridiculous," said 20-year-old Jose Quiles, a tanning salon manager in Dallas, who paid about $10 Thursday for a little more than 6 gallons of Exxon-branded gasoline.

Corina Alba, 22, sees some correlation between gas prices and the possibility of war in Iraq, but the Anaheim, Calif., resident doubts international affairs solely explain the situation.

"I think it's just an excuse to raise prices," Alba said.

Earlier in the week, Sen. Charles Schumer, D-N.Y., called on the Federal Trade Commission to launch an investigation of industry practices. "It appears as if price gouging is taking place across the country," Schumer said in a letter to FTC chairman Timothy Muris.

The American Automobile Association supports Schumer's request. The travel company said it is also concerned about why prices have gone up so much in such a short period of time, though a spokesman stopped short of using the term gouging.

"We feel that most of the increase has been due to fear and speculation, rather than any change in the supply or demand for crude oil or gasoline," said Jeff Sunstrom, a spokesman for AAA. Regardless of the reasons, Sunstrom worries that today's high prices could be a harbinger of even costlier fuel by the end of April.

"Watch out between April 15 and May 31," said Tom Kloza, director of Oil Price Information Service, a Lakewood, N.J., publisher of industry data. Kloza said the imports lost after Venezuela's oil workers went on strike in December have not been adequately replaced and that could be a problem when the weather heats up and demand rises.

Gas prices typically rise during spring, when refiners shift from winter- to summer-grade fuel. The switch to cleaner-burning gas requires shutting down equipment, scrubbing it clean and starting it up all over again a process that causes supplies to contract and prices to move higher even under the best conditions.

The impact of this switch has already been magnified by the possibility of a U.S.-led invasion of Iraq, analysts said.

Trucker Tommy Wimberly paid $280 to fill up his rig with 166 gallons of diesel in Camillia, Ga., or about a third more than a month ago. "I don't like the high prices, but I'm not angry," said Wimberly, 43, who expects prices to go even higher if the United States goes to war with Iraq.

"There's nothing I can do about it," he said.

As the public face of the industry, gas station owners are frustrated by accusations of profiteering, but they insist they're not the ones to blame. They say suppliers have been steadily upping their "rack" prices for weeks and that station owners are merely passing along the changes to customers without any benefit to their bottom lines.

"I realize that the price of a barrel of oil has gone up tremendously, but the way that rack prices have gone up for the last two weeks is just not right," said Richard Loeber, owner of a Hess station in Union Beach, N.J. About 40 percent of the retail cost of gasoline is attributed to the price of crude oil, which has risen 19 percent since the start of the year to $36.79 per barrel.

Loeber said Hess has raised the rack price by 16 cents a gallon in less than three weeks and that he has maintained his 8-cent-per-gallon margin all along.

Loeber and other retailers attribute the rapid increases to "zone pricing," a phenomenon in which suppliers value their product based upon the highest level a particular market will bear. For example, if their customers' rivals are getting a nickel more per gallon at the pump, they will set their rack price accordingly, even if the supplier's costs haven't gone up.

"People know they're getting gouged, but believe me, it's not from the dealers," Loeber said.

The National Association of Convenience Stores, which represents about 100,000 sellers of gasoline, says its members are especially unhappy about the high gas prices because they detract from sales of soda and chips where they make most of their money.

"Our members make more off a 12-ounce coffee than they do off a 12-gallon fill-up," said Jeff Lenard, the organization's spokesman.

For its part, the petroleum industry fends off critics at times like these by pointing to higher oil prices. The surge has mainly been attributed to traders' fears of supply disruptions in the event of a war in Iraq and the impact of the Venezuelan oil strike.

"The fundamental thing is that crude prices have gone up dramatically," said John Felmy, chief economist at the American Petroleum Institute.

www.newsday.com Feb 20, 2003 On the Web Weekly Gasoline Prices

Talk About: High Gas Prices Gas prices are nearing the $2 mark in the New York metro area. What are you doing to cope with the high prices? Who or what is to blame? What should we do about a national energy policy? Talk about it now.

The people voted for a bond to help fix the roads in New York. Gov. Cuomo came up with this bond and New Yorkers are still paying 10 cents per gallon to pay off the bond. Everyone forgot about this... Who knows if the bond will ever be paid off. Submitted by: Danism 1:45 PM EST, Feb 21, 2003

Its all about oil, money and war for oil and money for the Politicans & businessmen to fatten their wallets. Submitted by: ed 1:38 PM EST, Feb 21, 2003

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By Zubin Jevleh Staff Writer

February 21, 2003 Richard Huang may have to give up his first love: his car. The 21-year-old Valley Stream resident drives three times a week to Stony Brook University where he studies computer science.

But with higher gas prices, the 80-mile roundtrip journey has become less fulfilling.

"I love driving and listening to my music, but I can't keep paying this much if the prices go any higher,” said Huang, who shelled out $35 to fill his 1997 Lexus LS400 with mid-grade gas at an Amoco gas station in East Meadow Thursday.

With the threat of war against Iraq, low oil supplies, and an ongoing oil strike in Venezuela, gas prices have soared in recent weeks. At some local gas stations, prices for premium have topped $2 a gallon. According to the Long Island Gasoline Retailers Association, self-service regular grade gas has climbed three cents in the past week to average $1.76 on Long Island. (The average for premium is almost 20 cents higher.)

Instead of filling up their tanks, several drivers said they were setting a $20 or $30 limit on gas purchases now. Others are parking SUVs in favor of cars with better gas mileage.

Andrew Lawton, a construction contractor, said he had to reduce how often he drives his 2002 Ford Excursion.

"I was paying close to $60 to fill up, but now I've been taking out my other car more,” said Lawton of Levittown.

Consumers are not the only ones hurting. At the independent Emporium gas station in East Meadow, owner Sardar Liaqat said he had to cut one worker's hours to save money to pay his bills. "The same number of people are coming but they are buying less gas,” said Liaqat. In the past two months, he said, the amount of gallons he had sold had dropped by half.

Despite the wallet-wilting prices, "when compared with the early '80s, present prices are still significantly less,” said Bill Bush, spokesman for the American Petroleum Institute. Adjusted for inflation, the price per gallon for gas in 1981 was $2.70.

Still, Huang, who only works part time, said he had started to think about alternative means of transportation. "I had been fighting it, but I'm going to have to start taking the train,” he said.

www.planetark.org

USA: February 21, 2003

NEW YORK - An energy crunch that is dealing a blow to fuel consumers' pocketbooks proves the need for the United States to become more independent from unreliable foreign oil supplies, the American Petroleum Institute (API) said.

The Bush Administration has been attempting since 2001 to push through controversial aspects of the White House energy program that would increase domestic oil drilling, but it has met resistance from Democrats claiming the need for more petroleum does not justify the environmental costs.

"We're in the same fix we were in two years ago, and nothing's been done to fix the problems that existed then." said John Felmy, director of policy analysis and statistics at the API, which represents members of the oil industry.

"Our energy infrastructure is straining to meet the ever-growing demand, and when problems occur, like the ones we're seeing, we experience this volatility," he told Reuters.

Oil prices have spiked to within reach of two-year highs near $38 a a barrel, as a national strike in Venezuela cripples exports from the OPEC nation and the United States is hit with strong heating demand and fears over war on Iraq.

Retail gasoline prices have surged above record highs for February at $1.66 a gallon on average, while heating oil prices have hit three-year highs at $1.71 a gallon, leading to calls from petroleum distributors for a release from the nation's Strategic Petroleum Reserve (SPR).

The Bush administration said last week it was monitoring a drop in U.S. crude oil inventories, now the lowest in 27 years, but indicated there would be no release of oil from the SPR, which is used only in cases of severe disruption.

Against this backdrop, the Senate is expected to vote in mid-March on whether to open the Arctic National Wildlife Refuge (ANWR) to oil drilling - the most controversial aspect of Bush's energy plan - with supporters hoping to reverse last year's defeat and stressing the need for energy independence.

The Bush administration is pushing to open the refuge and tap its potential 16 billion barrels of oil to reduce U.S. dependence on crude imports, particularly as fears mount that a possible war with Iraq could disrupt supplies from the oil-rich Middle East.

But most Democrats and environmentalists oppose drilling in ANWR and want to protect the reserve's wildlife. They say there is not enough oil in the refuge to justify disturbing the area's wildlife, and argue the government should raise fuel mileage standards for sport utility vehicles.

www.csmonitor.com By Kris Axtman | Staff writer of The Christian Science Monitor

HOUSTON – Aurelio Garcia sits inside his Ford Explorer and waits for the familiar click that signals his gas tank is full. Normally, he spends his time at the pump reflecting on his busy day ahead. But today, as the digits climb higher and higher, Mr. Garcia is thinking about war.

"It's necessary," he says halfheartedly, looking at the final bill: $26.70. "We've got to get Saddam Hussein out of there."

While some consumers are grousing about Iraq as they grip the wheel, others, like Mr. Garcia, say they are willing to pay what it takes - at the pump or in the US military budget - to remove Saddam from power. But whatever their views on Iraq, Americans are finding that fuel costs are rising along with the prospects for war.

It's especially bad out West, with gasoline topping $2 per gallon in some California cities. And people who fly as well as drive get a double-whammy: $10 fuel surcharges on recently slapped onto each leg of many flights.

Various factors are at work, from low stockpiles at home to uncertainties in oil-producing locales as diverse as Nigeria and Venezuela. But experts say the politics and psychology of war are also playing an important role.

"The price of gasoline began to increase immediately following Bush's State of the Union address, in which he hinted that we could be at war with Iraq in a matter of weeks," says Geoff Sundstrom, a spokesman for AAA in Heathrow, Fla. But the price increase, he says, stems more from fear of the unknown than from any real spike in demand.

Among the non-Iraq factors at play:

• Oil shipments from Venezuela are still lower than normal because of the country's three-month strike aimed at ousting President Hugo Chávez. The US typically imports about 13 percent of its oil from Venezuela, but has had to find alternatives as the strike stretches on.

• This is typically the time of year when many US refineries are brought down for routine maintenance. They may either be running at lower levels or not producing at all, forcing some areas to rely on reserves. Three Venezuelan-owned refineries in the US have shut down altogether.

• With meteorologists predicting a cold spring, many refineries are choosing to produce more heating oil than gas, again limiting supplies at the pump.

But overriding all this, in the minds of many - including commodity traders - is a possible war with Iraq.

That, along with cold weather, was cited by analysts as a key reason yesterday's government report on wholesale prices showed a 13.7 percent one-month jump in gasoline and a 19.7 percent spike in heating oil.

"In my honest opinion, they're raising the price of gas because they need money for the war," says Carl Fua, speculating that the US government itself is manipulating prices as he fills his company truck with gas at a Chevron station near downtown Houston.

In Texas, regular unleaded averages about $1.60 per gallon.

Mr. Fua used to spend about $25 filling up; he now spends about $40. And his waterproofing company will no doubt have to pass that extra cost to the consumer. "This price increase affects everything," he says, jumping into the driver's seat. "It's the trickle-down effect."

Few see a government conspiracy, but all consumers are feeling the same pinch.

AS of Thursday, the national average for regular unleaded is $1.665 per gallon, according to AAA, the nation's largest auto club. States such as California and Hawaii are the highest, at $1.914 and $1.884 respectively - and at least 500 gas stations around the country are charging $2 or more for a gallon of regular unleaded.

Diesel fuel is also setting records, averaging $1.751 a gallon. At a diesel station east of downtown Houston, Phillip Borski tops off his truck's two 50-drum tanks in preparation for a day of furniture delivery. He's less convinced that the price increases are due to war jitters.

"Everybody keeps saying it has to do with Iraq, but I think it has more to do with Venezuela," he says.

Even a minor disruption in deliveries from Middle Eastern countries could cause gas prices to spike even higher - especially in a protracted battle, says Amy Jaffe, senior energy analyst at Rice University in Houston.

"We should be able to control prices for a period of time with our strategic reserves, but not if the war lasts for 6 to 8 months," she says. Indeed, crude oil inventories in the US are at historic lows, allowing for little flexibility.

The good news, say analysts, is that Persian Gulf countries have already begun to increase the amount of oil produced, and the US should see the result of that extra effort in the next several weeks.

Even with that additional oil prices may well jump even higher in a war. But panic, experts warn, would only worsen the problem.

"We don't want people to look at gas the way the administration advised them to look at duct tape," says Larry Goldstein, president of the Petroleum Institute Research Foundation in New York. "The market is ... too fragile for everyone to be topping off their tanks. That could create the very thing we're concerned about."