$3 gas is back, may stay awhile
Palm Beach Post
By SUSAN SALISBURY and EVE SAMPLES
April 15, 2006
Back by unpopular demand, $3-a-gallon gasoline is once again showing its ugly, budget-wounding self at the local pump.
Just in time for a holiday weekend.
On Friday, prices at a smattering of area gas stations had reached the $3-and-above mark for regular, though the majority were below that. Still, the dreaded $3 threshold, last seen here after Hurricane Katrina hit the refinery-rich gulf states in August, is appearing a lot sooner than most experts and motorists expected.
Angie Heidinger usually keeps tabs on gas prices at her neighborhood station in West Palm Beach. But Friday, en route to visit her mother in St. Augustine with a 5-year-old and 2-year-old strapped into the back seat, she didn't check the prices until after the pump spat out a receipt for 11.6 gallons.
The damage: $35.51. That's $3.05 a gallon. For regular.
"Holy cow," she said, eyeing the receipt at the Sunoco just east of Interstate 95's Stuart exit. "I thought it would go up to $3 this summer. I just didn't think it would go up this quickly."
For the 29-year-old middle school teacher, it was another reminder of how rising fuel costs are slicing away at her family's budget.
"We have two college funds going on. We have tuition for day care," she said.
Experts say drivers should get used to the high prices.
"It will continue to climb beyond $3, and most likely will stay there in May and June," said Bernard Baumohl, executive director at The Economic Outlook Group LLC in Princeton Junction, N.J.
Several factors are coming into play, but the major reason for the price spike is the high cost of crude oil, said Tancred Lidderdale, an analyst with the federal Energy Information Administration.
Gregg Laskoski, spokesman for the AAA Auto Club South in Tampa, agreed.
"The single most important factor here is that crude oil is trading at $69 a barrel," Laskoski said. "Consumers are not going to get a break as long as oil is trading at those prices."
Light, sweet crude for May delivery rose 70 cents to settle at $69.32 a barrel Thursday on the New York Mercantile Exchange, which was closed for Good Friday.
Tom Bentz, an analyst at BNP Paribas Commodity Futures in New York, said the crude oil market is "still in a bullish uptrend" because of underlying support from various supply concerns — the disruption of Nigerian crude supplies by rebels, the possibility of Iranian oil exports being halted due to political tension and domestic refineries having trouble turning enough crude into gasoline to meet consumers' needs.
U.S. consumers are now paying on average $2.72 for a gallon of gasoline, according to AAA's daily fuel gauge report. That's up more than 45 cents from a year ago.
Floridians were paying $2.82 on average Friday. In the West Palm Beach-Boca Raton market, the average was $2.87. That's 52 cents more than last year, or about $10 more for a 20-gallon tank.
At Palm Beach Shell on Royal Poinciana Way in Palm Beach, regular climbed to $3.09 Friday afternoon from $3.05 earlier in the day.
Station owner Pell Rogers, a former assistant regional manager for Texaco, said it's all about OPEC and oil prices. He said he could recall the good old days nine years ago, when he paid $5,000 to $6,000 for an 8,000-plus gallon tanker of gasoline. This week, the price was $25,000.
"My gas has gone up 15 cents in the last four days," Rogers said, thumbing through records showing the prices he's paying. "I just had a 9-cent increase this morning. I'm getting really mad about it, too."
Most of the customers at the Palm Beach station didn't seem to mind the price. Several even paid for full-service premium, which was selling for $4.05.
Andrew Tislau, a West Palm Beach resident and recent graduate of Palm Beach Atlantic University, was putting $3.25 V-power gasoline in his car at Palm Beach Shell as he headed out to Orlando.
"It will cost $100 round trip," Tislau said. "There's nothing we can do about it. It's Easter. You have to travel and see the family."
Across the Intracoastal Waterway in West Palm Beach, John Jerome, a Lake Worth resident and landscaper, was shelling out for the $3.07-a-gallon regular at a Chevron station just west of I-95 on Okeechobee Boulevard.
"I don't pay much attention to gas prices," Jerome said. "Someday this will seem like a deal. It might be $5 a gallon in the next 10 years."
So far, high prices have not dampened demand.
At the Stuart Sunoco station where gas was $3.05 a gallon, cashier Jon Long said he didn't notice a dip in business Friday, even though the station listed some of the highest prices in the region. Even with the Chevron across the street selling regular for 16 cents a gallon less, customers continued to file into the Sunoco.
But tow truck drivers Sherman Mignault and Vinny Orlando noticed. The two leaned against a wall outside the station but had no intention of buying gas there.
Even Long, who works part time at the station, was perplexed by the rising costs. He said he didn't understand how big oil companies could post sky-high earnings while gas prices soared.
"Record profits, but we're paying for it. I'm trying to figure that one out," he said.
Orlando joked that he knew a solution: "We'll have to go out and hijack a fuel tanker."