- The Washington Times - Tuesday, October 15, 2002

Gasoline prices have spiked almost 3 cents nationally and 4 cents in the Washington area in recent weeks, primarily because bad weather along the U.S. Gulf Coast and uncertainty about the Middle East have made crude oil more expensive.
The national average price of a gallon of gasoline, including all grades and taxes, was about $1.49, up 2.93 cents from Sept. 27, according to the Lundberg Survey of 8,000 stations.
The national average price of gasoline, including taxes, at self-serve pumps Friday was about $1.45 per gallon for regular, $1.55 for midgrade and $1.64 for premium, according to the twice-monthly survey by the California-based research group.
In the Washington area, the average price of a gallon of regular, unleaded gasoline is $1.45, up from $1.41 last month, according to AAA Mid-Atlantic, a regional advocacy group for motorists.
"This is really the first major price hike in six months," said John C. Felmy, an economist for the American Petroleum Institute, an oil industry trade group.
Prices have been flat since April, he said.
The cost of crude oil which makes up about 42 percent of retail gasoline prices is about $30 a barrel, $5 more than in July, Mr. Felmy said.
Refiners along the Gulf Coast were forced to cut production by 10 million barrels this fall when bad weather battered the region. Hurricane Lili ripped through Louisiana and Texas early this month, just days after Tropical Storm Isidore flooded Louisiana, Mississippi and Alabama.
Fears about unrest in the Middle East and increased demand for energy as the national economy recovers also have helped fuel an increase in gasoline prices, Mr. Felmy said.
Brent crude, the benchmark for two-thirds of the world's oil, has risen 41 percent on the International Petroleum Exchange in London this year, in part because of the threat of disruptions to Middle Eastern supplies.
Rilwanu Lukman, secretary-general of the Organization of the Petroleum Exporting Countries, told an interviewer yesterday at a gas conference in Qatar that OPEC had "plenty of spare capacity to offset any supplies that may be disrupted by a conflict with Iraq."
OPEC accounts for one-third of the world's oil supply. Concern of an attack on Iraq has "put a $2 to $3 premium" into the oil price, Mr. Lukman said.
Even though some drivers in the Washington area are steering clear of the pumps because of sniper attacks at gas stations, demand hasn't fallen enough to force down local prices.
Four of the sniper's 10 victims since Oct. 2 were shot at gas stations in Maryland and Virginia.
Service stations along major highways have experienced the biggest drop in business, but the oil companies that supply these dealers with gasoline haven't given them a break on prices, said Roy Littlefield, executive vice president of the Service Station Dealers of America trade group.
"The dealers almost have to pass on those higher costs just to stay in business. These are small businesses with big rents," Mr. Littlefield said.
Some dealers have brought in extra workers during the morning and afternoon rush hours to ease customers' fears, he said.
"They are in a tough spot because they are caught between these fixed labor costs and the cost of gasoline. They are trying to hold the line against a price increase as best they can," he said.
This article is based in part on wire reports.

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