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Gasoline Prices Up 20 Cents, Increases Don't Seem to Be Slowing Travel, AAA Official Says

Posted on: Saturday, 11 March 2006, 00:00 CST

By MATTHEW THOMPSON

The average price of regular gasoline across the state has shot up 20 cents per gallon in the past two weeks.

Prices have jumped 6 cents in Charleston since Monday, when the average price for regular unleaded gas was $2.37 a gallon. This morning the average price for Charleston was $2.43, according to the AAA daily fuel gauge report.

The increases do not seem to have slowed travel, said Greg Beheler, a spokesman for AAA of Southern West Virginia. Beheler said the agency is seeing the usual business as key travel dates, including spring break and Memorial Day, approach.

"Historically, gas prices have not done much to deter vacation- type travel," Beheler said. "If anything, Americans will start to take shorter trips if they're worried about gas prices."

Beheler hopes prices will decrease some, but that hope hinges on current discussions by the cartel of oil-producing nations to increase crude oil production levels around the world.

"So much depends on OPEC," Beheler said. "If they curb production, you'll see it spike, if they increase it, we will get some relief."

Jan Vineyard, executive director of the West Virginia Oil Marketers and Grocers Association, said prices have jumped for various reasons, including the escalating price of crude oil and many refineries being taken offline for maintenance issues.

"Everything was normal until late February," Vineyard said. "Then it started inching up."

Around that time, crude oil rose to its highest price in a month, $63.67 a barrel, over concerns that disagreements about Iran's nuclear program could slow or stop the country's oil exports. Iran is OPEC's second largest crude oil producer behind Saudi Arabia.

Last week, crude oil prices were still around $63, but leveled off to $60 a barrel in trading on Thursday. Last September, crude oil hit $70 a barrel, following the devastation of Gulf Coast refineries after Hurricane Katrina.

Vineyard said this is also the time of year when many refineries are shutting down temporarily for maintenance issues, which can cause distribution problems.

She said the shutdown is a way for refineries to prepare gasoline production for the upcoming summer driving season that unofficially kicks off on Memorial Day.

The U.S. Energy Information Administration reported Wednesday that commercial gasoline stocks fell by 1.1 million barrels to 224.8 million barrels last week as refineries lowered operation by 2.2 percentage points to a relatively low 83 percent of operating capacity.

"When you take some of those refineries offline, it hurts the inventory level," Vineyard said. "Then the burden is passed onto the consumer."

West Virginia is handicapped in gasoline prices because of a lack of fuel pipelines across the state. Gas is trucked into the state from bordering states, including Virginia and Kentucky, that do have pipelines.

Vineyard said predicting price trends is difficult. She hopes if crude oil prices decline and refineries get back online, consumers could see a price break at the pumps.

"I can't predict what we are going to do because I'm usually wrong," Vineyard said. "Let's just say they're going to go sky high. Maybe that will mean they'll come down."

Contact writer Matthew Thompson at matthewthompson@dailymail.com or 348- 4834

Source: Charleston Daily Mail

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