Gas prices again rise

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) 2000 Oregon Live.

Gas prices again rise; concern about summer supplies blamed The Associated Press 5/6/00 12:21 PM

DETROIT (AP) -- Gasoline prices appear to be on the rise again, with concerns about summer supplies apparently fueling the increase.

After a several-week slide, service stations around Detroit say oil companies and distributors they buy gas from raised their prices last week 10 to 17 cents per gallon, based on market concerns about summer fuel supplies.

As a result, the $1.30-per-gallon gas prices seen earlier in the week have been upped to $1.40 or more, the Detroit Free Press reported Saturday.

At many mid-Michigan pumps, gas prices jumped about 30 cents a gallon between Wednesday and Friday, from $1.17 earlier last week for a gallon of regular unleaded to $1.49.

"I work at McDonald's, so I don't get that much money," Andy Duso, a 19-year-old Saginaw Township man, told The Saginaw News. "I put in like $2 every day, but $2 doesn't last. Before I know it, my gas light is on."

AAA Michigan spokesman Jim Rink said prices are up statewide.

"Will it get any better? In the short term, maybe. In the long term, no, because we're heading into the travel season. Prices always increase during the summer," Rink told the Saginaw newspaper.

Groups such as AAA Michigan do not poll stations until Monday, though there's evidence the price-shrinking streak that began March 13 has come to an end.

As of last Monday, AAA said, the average Detroit-area price for regular, unleaded gas was $1.33 per gallon, down 15.8 percent from the record high average of $1.58 per gallon set March 6.

As the owner of a Mobil station in Pleasant Ridge, Harry Singh said he was surprised Friday morning when his computers revealed the price he pays for gas increased 13 cents overnight.

"In my 10 years of experience, I've seen four- to five-penny increases, but 13 cents at one time is a big jump," he said. The result: his self-serve unleaded gas jumped from $1.35 to $1.48 per gallon.

Gary Ptasznik, a Shell station owner in Farmington Hills, said his distributor blamed a 10-cents-per-gallon price increase on the market.

"They say the spot market is going up, but how come prices don't go down as fast as they go up?" he said.

Experts say rising crude oil prices -- expected to reach about $27 per barrel for June deliveries -- are not to blame for this week's retail rise. That was the problem earlier this year when the Organization of Petroleum Exporting Countries had agreed to limit production. Prices rose to more than $30 per barrel until OPEC agreed to open its spigots in mid-March.

The problem now involves concerns about summer gasoline supplies, said John Griffin, executive director of Lansing-based Associated Petroleum Industries of Michigan, which represents major oil companies.

Last week, U.S. gas inventories were 202.5 million barrels. That was up 1.8 million barrels from the previous week, but 14 million barrels below levels during the same week last year.

Griffin said that isn't a cause for alarm, but it's enough of a decline for traders who buy and sell large quantities of gasoline on commodities markets to demand higher prices. In turn, that prompts the oil companies and independent wholesalers to raise their prices.

While some experts say the problem could correct itself quickly, Griffin said trying to guess gas prices is like watching the stock market.

Jonathan Cogan of the federal Energy Information Administration said there are no sound indications that a dramatic trend upward in gas prices is under way. His group predicted that nationwide gas prices this summer could average $1.46 per gallon, 4 cents more than last week's national average.

http://www.oregonlive.com/newsflash/index.ssf?/cgi-free/getstory_ssf.cgi?g8700_AM_MI--GasPrices&&news&newsflash-financial

-- Martin Thompson (mthom1927@aol.com), May 06, 2000

Answers

Petrol prices on the rise again

Petrol prices are on the way up again after a round of price cuts.

BP, Mobil, Caltex, and Shell all announced a 3c a litre rise yesterday, while Challenge will decide today what it will do.

The increase is the first since March 8 and follows five price drops. The companies laid particular blame on the rising cost of refined petrol from overseas, as well as crude oil costs.

"We have seen an upward movement in these costs for a few weeks, but resisted lifting our prices in the hope they would soon drop again," said BP managing director Peter Griffiths. "I'm expecting the current higher refining margins will be short-lived as refineries resume normal operations, but the reality is the fuel market is extremely volatile.

"Motorists have to get used to frequent price fluctuations."

Mobil spokeswoman Rowan Macrae said refined petrol costs had risen 7c a litre in the last three weeks.

She did not know if motorists could expect more price rises. She said price fluctuations were a symptom of a very competitive and price- sensitive market.

A Shell spokesman said there was "huge pressure" on the price of refined petrol as the United States headed into its heavy summer driving season.

http://www.press.co.nz/2000/18/000505n04.htm

-- Martin Thompson (mthom1927@aol.com), May 06, 2000.


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