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Fuel for the fire: Gasoline prices on rapid rise

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Posted: Wednesday, March 9, 2005 12:00 pm | Updated: 3:16 pm, Wed Aug 15, 2012.

By Judy Pack

Killeen Daily Herald

Christina Hester was feeling the pinch of the latest gas price increase as she filled up her Jeep Cherokee Tuesday afternoon.

AAA Texas reports that the average price of a gallon of gasoline in Texas has jumped 3.8 cents in two days, but that statistic only tells part of the story. In the Killeen area, motorists have seen prices rise as much as 13 cents a gallon in the past two weeks, topping $1.90 a gallon for regular unleaded.

And experts say dont expect any relief anytime soon.

Some analysts have predicted that some parts of the country could see $3 a gallon gasoline before the end of the summer. Thats not likely to happen in Texas, but Rose Rougeau, a spokesperson for AAA Texas, said Texas drivers could easily see the average price of a gallon of gasoline this spring rise above the record high of $2.054 set on May 26 of last year.

Two days ago, the average was $1.829, Rougeau said Tuesday. A year ago, the average was $1.60 a gallon. Texas motorists are seeing the same increases that motorists throughout the U.S. are seeing with the only plus being that Texas still has one of the lowest averages in the country. Hawaii has the highest at $2.418 a gallon followed by California at $2.245 a gallon. New Jersey has the lowest gas price average in the country at $1.829.

Drivers can anticipate more increases at the pump as the cost of crude oil continues to rise, she said.

Crude oil is currently near $54 a barrel, and refineries are starting to switch production to reformulated gasoline, which is more costly to produce.

Dr. Michael Fabritius, who teaches economics at the University of Mary Hardin-Baylor in Belton, said refineries also convert their production from heating oil to gasoline at this time of the year. When refineries are not in production, supplies decrease.

The supply of gasoline, Fabritius said, is being squeezed right now, which usually happens at this time of year.

The tighter supply and increased demand for the gasoline causes prices to go up, he said. It is always about supply and demand.

Concern regarding the situation in the Middle East always contributes to costs, as well as the increased demand for heating oil from Asia and China.

Not that many years ago, they were supporting themselves, and now they are a huge importer of oil, Fabritius said of the Asian nations.

The increased gasoline costs are also a result of colder weather in the northeastern part of the country and the declining value of the dollar in international trade, Rougeau said.

Fabritius said consumers are starting to just accept the fact that the cost of gasoline is going to go up and have adjusted to paying the higher prices.

We wouldnt see the continued sale of gas-guzzling vehicles if we hadnt accepted the idea of higher-costing gas, he said.

The cost will come down a little, he said. This jump was a quick one.

Although prices of gasoline have doubled since 1980, Fabritius pointed out that the situation was much worse in the early 1980s.

Crude oil, he said, is $55 a barrel. The way things were going in the early 1980s, we would be paying $80 or $90 a barrel by this time, he said

Karen Walinder, vice president of Mickeys Convenience Stores in Killeen, said her business always sees an increase in gasoline costs in early March, but nothing like this year.

You hear the same things we hear, she said. This last week weve had 13 cents in increases. If we get a five- or six-cent increase in one day, we must change our prices. If its just a penny or two, we dont change it.

The news was little consolation to Hester as she filled up Tuesday afternoon at Mickeys Convenience Store at 2000 Trimmier Road. Hester said she hates to see the price increases, but must have the gasoline.

I want to buy the good fuel, and my mechanic suggests buying fuel here, she added. You get what you pay for, I guess, she said with a smile and a shrug.

The impact of higher prices will hit her when she gets her monthly credit card statement, she said, although she traded vehicles last fall in an effort to conserve fuel.

I have always driven an SUV, she said. I went from an Expedition to a Jeep Cherokee in November.

The switch has made a difference in her pocketbook, she said.

People begin to monitor their driving habits more when gas prices increase, Rougeau said, but they have not stopped traveling. During the summer, more people drive, causing the price of gasoline to go up.

They may alter their plans by staying three or four days instead of four or five days, she said.

In the fall, demand for gasoline will go down, she said.

Higher prices affect us when it has an impact on our pocketbook, she said. We suggest consolidating trips, do comparison shopping through the newspaper or online, and go to one place to do your banking and shopping.

Contact Judy Pack at jpack@kdhnews.com

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