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Hurricane Katrina Causes Valley Gas Prices to Surge to New Highs

Posted on: Friday, 2 September 2005, 18:00 CDT

Sep. 1--HARLINGEN -- The effect of Hurricane Katrina reached into the Rio Grande Valley Wednesday as consumers discovered gas prices increased by as much as 60 cents per gallon for regular unleaded.

It was one the biggest single increases since the first of the year and since the oil crisis of the 1980s.

"I just put in $9," said Joey Herrrera at the Circle K at the end of Morgan Avenue. "It was for three gallons."

The Brownsville resident said he commutes seven days a week to work and to Texas State Technical College.

"It would be nice if I had a job back home," he said, "but I work and go to school here in Harlingen."

Herrera said he would keep driving even though he doesn't see any relief from the rising prices for gasoline.

On Wednesday, the average price for a gallon was $2.99, up from Tuesday's average price of $2.46 a gallon, but a gasoline station in the Weslaco area was selling a gallon for as low $2.38 on Tuesday.

The increase was a lot more than was predicted as some analysts anticipated increases of between 20 and 30 cents.

"But 50 or more cents per gallon?" said Rose Rougeau, a spokeswoman for AAA Texas. "I have never seen prices that high since I began working here."

If today's prices are adjusted for inflation, she said such increases could equal the prices people paid during the oil embargo, which affected prices in the late 1970s and early 1980s.

The effect of Hurricane Katrina, which has disrupted oil production in key states like Louisiana, Mississippi and Alabama, came at time when the oil market was tight.

"It's now a tighter market," Rougeau she said. "We will see the effects that tapping of the strategic oil reserve would have on oil."

Rougeau said the increase in oil prices, which reached the $70 per barrel of crude on Tuesday, is being felt more in cities like Denver, Detroit and New York City.

Gasoline has an effect on many sectors of the economy, including the retail.

Henry Roberts, owner of the Bicycle World in Harlingen said he has noticed slight increase in every shipment he has been getting because of high fuel prices.

Severo Garcia and Aleida Garza, paying more for gasoline will hurt their earnings.

"I work for the postal service," Garza said, "but I drive my own car."

He said he fills the tank of his mid-sized vehicle every three days and although he is reimbursed for the miles he drives, the money he clears is less these days.

Garza, whose husband owns Valley Glass Tinting, said they will plan more anytime they go out.

She put in $10 worth of gas at a Citgo filling station at the corner of FM 507 and 508, but wished she had more money with her to pay for more gas.

But noon Wednesday, the station was one probably the only one in the areas selling a gallon of regular unleaded for $2.46 -- a price which was not expected to last very long.

"I am thinking in trading this car for Volkswagen beetle," she said. "Or maybe for a horse."

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To see more of the Valley Morning Star, or to subscribe to the newspaper, go to http://www.valleystar.com.

Copyright (c) 2005, Valley Morning Star, Harlingen, Texas

Distributed by Knight Ridder/Tribune Business News.

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Source: Valley Morning Star (Harlingen, Texas)

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