Full Tank, Empty Wallet

Average US gasoline price sets record

Published: 26-Aug-2003

SARATOGA SPRINGS - Labor Day vacationers and kids driving back to college will have to pay more for gasoline following the largest single-day price increase in industry history last Wednesday.

A 9.5-cent jump on the New York commodities market was primarily the result of refinery problems caused by this month's power outage, combined with already low inventory levels.

Prices aren't expected to start coming back down until late September when summer driving slacks off, creating less demand, said David Rothberg, gasoline marketing manager for Stewart's Shops Inc.

"It takes about that long for the U.S. to recover from short supply," he said. "Demand has been pretty aggressive. The industry has just not kept up with that demand.

"After Labor Day, driving will start to decrease. That will help reduce demand. At that point, you'll see a correction."

For now, area residents are paying roughly 10 cents more than a week ago and anywhere from 20 to 25 cents more than at summer's start. On Friday, some local stations posted an 8-cent price increase.

"Unfortunately, it's at a time when demand is high," Rothberg said.

Michael Meath of Agway Energy Products said, "If you look at the last 10 years, you typically get price spikes around Labor Day and Memorial Day.

"I just filled up at a station in the Adirondacks," he said. "It was something like $1.80 per gallon. It was expensive."

Todd Ward of Chester, N.J., paid $1.77 for regular unleaded at a Saratoga Springs service station on Monday. Back home, prices were about $1.65.

"That was the first thing we saw when we pulled in," he said. "I can't believe the prices up here. I thought they would have been a little cheaper."

Like many motorists, Ward said there isn't much to do except save money elsewhere because driving is pretty much a necessity.

"It's just more unfortunate than anything," he said. "It's probably going to take money out of something else."

Ward said rising prices might spur more rapid development of fuel cell, electric and hybrid vehicles.

A variety of issues contributed to last week's price spike, Rothberg said. They include:

Low national inventory levels.

The power outage. Some refineries have been slow coming back online because of concerns about another outage.

Refinery troubles. A large Philadelphia refinery recently experienced problems separate from the power outage, which has contributed to rising East Coast prices.

An Arizona pipeline problem.

International situations. Iraqi pipelines have been destroyed, reducing availability from that country. In Venezuela, oil workers went on strike several months ago and are threatening to do so again. In Nigeria, violence and political

instability have resulted in reduced oil output.

Stewart's has 276 gas stations at its more than 300 convenience stores in addition to nine Mobil service stations it acquired when purchasing the former Congress Gas and Oil Co. Rothberg said the average price of unleaded regular at Stewart's stores is $1.769.

Stores in the lower Hudson Valley sell cleaner burning, more environmentally friendly reformulated gas, which also costs more. About a half dozen stores are selling premium gas for more than $2, he said.

Rothberg said gasoline prices are set at the corporate level with input from district managers.

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