[Fair Use: For Education and Research Purpose Only]

www.fayettevillenc.com/foto/news/content/2000/tx00jan/b25gas.htm

Paying more at the gas pump $1.50 per gallon predicted

By Catherine Pritchard Staff writer

You probably paid a little less at the gas pump in early January than you did in December, but industry observers say that trend wont last.

Like other petroleum-based products, the price of gas is headed up -- maybe way up.

Id say if all conditions remain unchanged, you can expect gas prices to soar -- maybe as high as $1.50 a gallon for regular unleaded gas in North Carolina, said Tom Crosby, a spokesman for AAA-Carolinas, the motor club.

That would be close to 30 cents more per gallon -- or $6 more for a fill up of 20 gallons -- than you pay now.

Several factors are combining to drive up gas prices.

First and foremost is the seemingly rock-steady resolve by the members of the Organization of Petroleum-Exporting Countries (OPEC) to keep their oil-production limits in place. They arent producing less oil than previously, but nor are they producing any more when demand ticks up, said Bill Weatherspoon, executive director of the N.C. Petroleum Council.

Greater demand

And demand is definitely ticking up, a result of the recovery of Asias economies, the recent onset of harsh winter weather in much of this country and the increasing growth in the already robust U.S. and European economies.

Crude oil has nearly tripled in price since last year this time, from barely $9 per barrel then to $25 or better now.

That has translated to a smaller, but still a substantial hike at the gas pumps. A gallon of regular unleaded self-serve gas cost 98 cents last January, based on average U.S. prices. It costs $1.29 now ($1.23 in North Carolina).

Weatherspoon said the price increases arent just squeezing consumers. Retailers and others in the gas-selling chain are probably seeing reduced profits as they try to balance their increased costs with the need to compete.

For example, the current situation probably makes it tougher on service stations that compete against convenience-store chains.

We tend to blame the person that we see and we do business with, Weatherspoon said. But what were seeing is much, much bigger than just the retailer pushing up the price.

Weatherspoon said the country isnt headed toward another gas crisis. He said, that at some point, he thinks Saudi Arabia will break the OPEC-imposed limits if the U.S. economy is endangered.

Oil reserves

He said the increased crude prices may also encourage small oil producers who had stopped pumping when prices dropped to go back on line again.

Crosby said the United States can also turn to its own vast emergency oil reserves if needed.

In a way, Weatherspoon said, the increase in crude oil prices can be seen as good.

We have a lot of allies like Mexico and Venezuela who depend on oil for their economies, he said. If the price of crude went down, down, down, then theyd have problems, and wed have problems. It needs to be a realistic price for these countries to be healthy.

Conservation trend

Higher oil prices also encourage conservation. With gasoline at such low (price) levels, people would begin to waste again, he said.

Crosby agreed that higher gas prices will cause people to cut back their driving.

It will make people evaluate their travel plans, he said. Well probably see a lot more travel closer to home, and we might see shorter stays, because people will cut out extra driving theyd planned.

**********************************************************************

-- Dee (T1Colt556@aol.com), January 25, 2000

Answers

Oh the shock of it. They might be forced to pay for gas what we have been paying in the mountains of Northern CA for almost a year!

-- marsh (armstrng@sisqtel.net), January 25, 2000.

If the good people of California have a problem that can be directly tied to their legislators in Sacramento (i.e. high taxes on gasoline), I suggest they gather their pitchforks and torches and storm the castle as it were. Please do not respond in glee that the rest of us now get to suffer as you have. After 20 years in CA, I lost patience with a populace too busy to do anything against such a clear and present danger to liberty. (i.e. state politicians.)

-- Chris Tisone (c_tisone@hotmail.com), January 25, 2000.

Marsh,

"They" is me. LOL

Posted this since I have been reporting for weeks of no increase in gas prices here. Demographics in this area will not be supportive of this increase--mean income is fairly low. Not much here except for Pope AFB, and Ft. Bragg...but the area is growing.

~Dee =)

-- Dee (T1Colt556@aol.com), January 25, 2000.