Expert Says Gas Prices May Ease After The Summer Travel Season

Aug. 19–TAMPA — The U.S. petroleum industry’s top representative said Thursday he does not know when motorists might get a break on gasoline prices, although they might expect some short-term relief after the high-demand summer travel season.

Red Cavaney, chief executive of the American Petroleum Institute and a familiar spokesman on Capitol Hill, told a gathering at the Port Of Tampa that today’s near-balance between oil supply and demand on the world’s markets created the conditions spurring high gasoline prices.

“How high can prices go?” Cavaney said to reporters after the session with port tenants, employees and others. “I do not think anyone can say.”

There is no surplus of supply, he said. Demand from China, India and the United States is the big driver in today’s oil market, he said.

The seasonality of U.S. demand, as in previous years, might lead to lower gasoline prices after Labor Day, he said, although local competitive pressures must be factored in.

“Some stations have sent scouts out [to neighboring gas stations] and adjust prices four to five times a day,” he said.

Government regulation has curtailed corporate interest in building refineries in recent decades, he said.

Cavaney’s preferred solution to the gasoline crunch is to increase oil supplies, including investigating prospects for more off-shore drilling, while encouraging consumers to become more fuel efficient.

Still, he does not expect political conditions to favor drilling off Florida’s coast any time soon, although he said the United States should explore all potential sources of oil and natural gas.

Cavaney said Florida has an unusually high stake in energy issues because it ranks third in U.S. energy, petroleum and gasoline consumption and fifth in jet fuel consumption.

Because Florida has no refineries or interstate pipelines, the Port of Tampa is likely to increase its role in handling oil supplies, said Richard Wainio, director of the Port of Tampa.

Petroleum products, which have become the port’s top commodity, and phosphate products remain the port’s core business. The port has 10 terminal operators that handle 18 million tons a year of petroleum products, including gasoline.

Discussions at the state government level of a possible oil pipeline from beyond the state do not indicate any prospects in the near future, he said.

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