"Protests at the Pump: Could The Fuel Frenzy Happen Here?"

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"Could The Fuel Frenzy Happen Here?"


"Protests at the Pump: Could The Fuel Frenzy Happen Here?"

Wednesday, September 13, 2000 By Patrick Riley

NEW YORK  As European gas stations are rocked with protests and panic buying over surging prices, Americans have been taking the latest fuel crunch in stride. But a possible rise in electricity and heating oil prices this winter have some wondering if the fuel frenzy that's gripping Britain, Belgium, Germany and other EU nations will be making its way stateside.

"We don't know what's going to happen here," said Michael Shanahan, spokesperson for the American Petroleum Institute. "There are fears that there will not be enough heating oil in New England this winter (and) all the refineries are running at nearly 100 percent capacity."

Nationwide, drivers have been suffering from pains at the gas pump all year and air travelers have paid $20 surcharges on plane tickets because the price of crude oil, at $35 a barrel, is triple what it was less than two years ago.

Fuel prices are "much higher than people's recent experiences," said Douglas MacIntyre, an analyst with the U.S. Energy Information Administration. With the exception of a record high in 1981, he said, prices haven't been as high as they are now since the first energy crisis in 1973.

Though Europeans have reacted to the soaring costs in recent days by blocking refueling trucks in protest and letting service stations run dry, Americans may be less likely to stage a sit-in at the local Shell station.

What's actually angering Europeans the most is less the tightfisted Organization of the Petroleum Exporting Countries  whose Sunday agreement to raise its output quotas by 3 percent was viewed by analysts as insignificant  than the fuel taxes imposed by their own governments to pay for social programs.

"Gas taxes are a politically sensitive topic everywhere but the taxes in all the European countries on gasoline are at least double what they are in the United States and sometimes more than that," said Shanahan. "That puts it much further into the political arena in European countries than it does here."

European consumers on average pay more than $4 per gallon for unleaded gas.

France quelled protests over the weekend by agreeing to reduce fuel taxes, but British Prime Minister Tony Blair refused a similar course of action and resorted to calling in the military to chaperone fuel trucks to filling stations.

The cost of gasoline in Britain is the highest in Europe, $4.31 per gallon, and 74 percent of that cost is due to taxes.

In the U.S., federal and state taxes account for only about 36 percent of the cost of a gallon of gas, Shanahan said. The federal tax money goes into the general revenue and the Highway Trust Fund which builds interstate highway and bridges.

That's not to say fuel prices aren't on the agenda of activist Americans. Truckers have already taken the protest route, heading to Washington D.C. last year for massive demonstrations over the price of diesel fuel.

What may be even less likely to happen than protests is lines at the pumps.

"We have a much more open free market now than we did in the early 1970s, so the way the market adjusts for this is to increase prices," MacIntyre said. "When we had a shortage of gasoline in the Midwest (this summer), instead of having long lines we had high prices."

Summer gas shortages seized the Midwest, spiking the price of a gallon of gasoline in some states to more than $2. And prices for electricity and heating fuel could be in for another spike as the cold weather arrives.

"Our forecast shows in the near term oil prices going down but still remain at very high levels," MacIntyre said. "Heat oil and crude oil inventories are low, so there's a chance for increased price volatility this winter."

The White House said Wednesday it was examining options to ease soaring prices of crude oil, gasoline and heating oil, including possibly tapping the nation's petroleum reserve.


-- Carl Jenkins (Somewherepress@aol.com), September 15, 2000


I've been waiting for the diesel crunch to get here, but it never seems to come.

-- Loner (loner@bigfoot.com), September 15, 2000.

Patience. Patience. It will.

-- Wellesley (wellesley@freeport.net), September 15, 2000.

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