Gas demand still rising

Published 2:13 pm Friday, May 11, 2007

VIDALIA — Just when you thought they couldn’t go higher, gas prices did it again.

Refining capabilities and supply and demand are to blame for the gas pump agony, experts said.

One big reason for the price jump is refineries have been down for maintenance, said Laurie Falter, oil industry economist for the Energy Information Administration.

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The independent entity within the U.S. Department of Energy tracks the oil industry.

“Quite a few refineries in the Gulf Coast and Midwest have been offline,” Falter said. “Some (have been offline) because of planned maintenance, but we’ve also had quite a few unplanned outages from fires and equipment breakdowns.”

Less oil being refined means a smaller gasoline supply in the market, she said. Add that to the fact that the nation has been drawing from its stockpiles, and the market gets stressed.

“The market has been very tight for supply, but demand has still increased,” Falter said. “Because of that, the only mechanism to balance things out is to increase prices.”

But with the national average more than $3 a gallon, it appears not everyone is swallowing the higher prices.

“Demand has increased less so far this spring than we normally would expect it to increase,” Falter said. “It could be attributed to a response to high prices, people trying to curb some of their extra car trips.”

While the national average for the past month was $3.01, it looks like there’s an end in sight for the higher prices, she said.

The offline refineries should be back up and running soon, increasing production and lowering prices.

That, coupled with an expected dip in travel should bring the national average down below $3 sometime in June or July.

“We see prices leveling off to $2.95 and $2.96 (a gallon) in June and July and coming back up in August,” corresponding with peak summer travel times, Falter said.

Prices have jumped locally, too. The cheapest regular gas in Vidalia is $2.74, and the most expensive is $2.89.

Pumping gas at the Murphy USA on U.S. 65, Ferriday resident Hazel Minor said even though she only drives to work, church and the grocery store, she doesn’t like the rising prices.

“There’s not much that I can do about it, so most of the time I just suck it up,” she said.

One local station manager said people can be vocal about the cost of gasoline.

“We get a lot of complaints about rising and fluctuating (gas) prices,” said Jeff White, manager of the Raceway on Carter Street.

Across the river, prices are even higher, just less than $3 per gallon.

Another Natchez resident who works in Concordia Parish, Kendrick Grayes, said a good chunk of his paycheck went into his gas tank.

“It’s too high,” Grayes said. “I spend almost $200 every two weeks just getting to work, driving back and forth.”

Rising prices bring an increase in business for the less expensive gasoline retailers, but it also brings an increase in gasoline theft, station owner White said.

“There’s not a single age or race demographic that’s more likely to steal gas,” White said.

For those who complain convenience store owners are raising prices just because they can, White said most gas stations don’t make much of their profit from gasoline.

“The profits are made through retail, by selling snacks, sodas, beer and other alcoholic beverages,” he said.

While the price of crude oil may fluctuate, some costs come standard with gasoline prices. For example, federal and Louisiana state taxes add 38 cents — 18 cents federal and 20 cents state — to the price of every gallon of gas sold. Mississippi taxes 18.8 cents per gallon, plus national.

“As high as prices are here, I’ve had travelers tell me we have the cheapest gas from here to Florida,” White said.