- The Washington Times - Tuesday, July 12, 2005

Average gasoline prices jumped 10 cents nationwide last week to a record $2.33 for regular self-serve, partly because of fears that Tropical Storm Cindy and Hurricane Dennis would damage oil refineries in the Gulf of Mexico.

In the Washington area, gasoline prices rose 4 cents this past weekend, reaching a record high of $2.29 for a gallon of regular.

But the oil refineries were spared from the storms, a sign that prices might fall in the next week or so, said Michael Burdette, a senior analyst at the Energy Information Administration.

The price of crude oil, the greatest factor in the price at the pump, fell below $59 a barrel yesterday to $58.92 on the New York Mercantile Exchange, another positive sign for consumers. Last week, the price reached a record of more than $61 a barrel, followed by a drop after the London bombings.

Tropical Storm Cindy and Hurricane Dennis had prompted precautionary shutdowns of oil refineries, pushing prices higher. A year ago, Hurricane Ivan did massive damage to the oil pipelines in the Gulf of Mexico, which shut some refineries for several months.



Global demand is exceeding global supply of petroleum, which also is pushing the price up, Mr. Burdette said.

“This year, we had a double whammy … and at the same time, the typical seasonal run-up in gas prices,” he said.

A gallon of regular gas in the Washington area costs 14 cents more than it did a month ago and 36 cents more than a year ago, according to AAA Mid-Atlantic. Nationwide, the price has risen 41 cents from a year ago.

Drivers, in the midst of the busy summer travel season, are faced with the second record increase in four months. AAA expects about 35 percent of motorists to cut back on driving or seek alternatives, spokesman John Townsend said.

“There comes a point where there’s a psychological barrier in terms of gas prices,” Mr. Townsend said.

According to a June 30 AAA online poll, that breaking point was $2 for 19 percent of drivers, between $2.01 to $2.50 for 30 percent of drivers and more than $2.50 for 20 percent of drivers.

But local drivers seem willing to swallow the high prices like bad medicine.

D.C. resident Loretta Caldwell says the gas prices are “not fair,” but she can’t stop driving.

“I’m a mommy,” she said, and needs to drive her children to activities.

It cost her $8 to put three gallons of regular fuel in her car yesterday at BP Amoco at 13th and N streets NW, where regular gas cost $2.45.

Some area stations’ price for regular fuel was up to $2.59 or $2.49 per gallon, according to the Web site gasbuddy.com, where local residents can post the highest and lowest gas prices they find.

Edouard Alcarria of the District has to adjust his budget when he sees $2.39 on the pump of regular gas at an Exxon station at Second Street and Massachusetts Avenue NE.

“I don’t have a choice — well I do — but I have to drive,” he said.

Gas-station owners are facing a hit, too.

“It’s killing us,” said Harry Murphy, director of technical services at the Service Station Dealers of America, a trade group of gas-station owners.

“Premium gas sales, where the stations make their money, have gone completely to pot because people are buying what they can afford,” Mr. Murphy said.

Mel Sherbert’s BP Amoco in Marlow Heights yesterday was charging $2.39 for a gallon of regular fuel, up a quarter since two weeks ago.

The multiple, steep increases in the past few weeks don’t compare to anything since the Gulf War in 1991, he said.

His station has had a drop-off in demand, one that he doesn’t expect to see return until a few weeks after prices start to decline.

“Higher prices are bad for the service station dealer and the customer,” he said. “Most of us have rent increases, too. You just take a hit.”

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