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Storm Fuels $3 Gas Prices in Region

Posted on: Friday, 2 September 2005, 15:00 CDT

Sep. 1--Three-dollar gasoline finally arrived in Akron on Wednesday.

Feared for a long time as the latest example of outrageous fuel prices, the increase hit overnight at Akron stations, where prices had been averaging about $2.60 just a day earlier.

There were no celebrations.

"I think we are getting gouged," Bobby Moyers said as

he pumped regular gasoline for $3.09 9/10 a gallon into his pickup truck at the Speedway station at South Main Street and Waterloo Road in Akron.

Gasoline prices leaped nationwide as key refineries and pipelines remained crippled from the damage of Hurricane Katrina, crimping supplies and leading to caps on the amount of fuel delivered to retailers.

Just how bad the situation becomes for motorists, who are facing prices in excess of $3 a gallon in a growing number of markets, depends on how quickly electricity can be restored to Gulf Coast pipelines and refineries, analysts said. Flooding may have left some important refinery equipment submerged and it will be days before a full damage assessment is completed, industry officials and analysts said.

In Akron, retailers said they had resisted raising prices by more than a few pennies in recent days, even though wholesale prices had been going up every day this week. On Wednesday, the retailers gave in and began pushing prices much higher.

Akrongasprices.com showed nine stations above $3 a gallon at 9:30 a.m. Wednesday, but many more were as much as 60 cents less. By the end of the day, most stations were near the $3.09 mark.

Why such a big jump in one day? Kevin Thomas, vice president of the Akron Auto Club said retailers apparently had resisted big wholesale price increases earlier in the week, and in some cases were selling below cost as effects of the hurricane played out.

But when some stations started selling the higher rates, most of the others followed.

"Right now, we really need to resist the urge to panic over the situation and make matters worse," Thomas said.

Most retailers say they sell gasoline at about 10 cents more a gallon than the wholesale price.

And it doesn't take long for the new fuel to cycle through. John Ballard, Holland Oil's vice president for marketing, said his company's tanks can hold only about 1 ½ days' worth of fuel.

Chris Esakov, who was pumping gasoline at the Speedway station at South Main Street and Waterloo Road, limited his purchase to $15.

"That's all I want to put in there," he said. Fill-ups are just too expensive, he said.

His Ford F-250 pickup gets between nine and 10 miles per gallon, but he passed up a chance to go across the street to a Sheetz station, where the fuel was a dime less. "I didn't even think about it," he said, looking at the rival station.

Clyde Grimmett, a 69-year-old Green resident, remembers happier times, when his father owned a gasoline station that sold fuel for 9 cents a gallon.

"This will be the first time ever that I bought $3 gas," he said.

His Cadillac SRX station wagon gets about 15 miles per gallon and he drives about 20 miles to and from work at Bridgestone/Firestone.

He decided not to fill up at the new, high price, "just because I can tell my wife I only spent $30 on gas today."

He also passed on the lower price at Sheetz because he has a loyalty card at Speedway that gives him a discount when all the spots on the card are punched out.

To boost supplies, the U.S. government said it would loan oil from the U.S. Strategic Petroleum Reserve to refiners facing shortfalls and relax environmental restrictions on the type of gasoline sold during summer.

Analysts said that while shortages have been reported in a small number of markets, they do not believe the problem is widespread and they cautioned motorists not to top off tanks out of fear.

Asked whether he had any advice for a family planning a long trip for the holiday weekend, Thomas said, "Do I want to tell people to cancel their weekend trips? I think, obviously, the pocketbook will be making a lot of recommendations."

As for possible supply problems, he said it is too early to tell whether some stations will run out of fuel.

"I guess that depends on where you are going," he said. "I think that paying attention to what's happening at your destination is a good idea."

The AAA Web site offers gasoline price information in most major cities.

The Associated Press contributed to this report.

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Copyright (c) 2005, The Akron Beacon Journal, Ohio

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BRDCY, 5108,

Source: Akron Beacon Journal (Akron, Ohio)

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