Montana Fuel prices increasing, againgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Fuel prices increasing, again By LYNNETTE HINTZE The Daily Inter Lake
After a late-summer lull, gas prices are inching upward again locally and across Montana.
"It won't be surprising if we see diesel at $2 a gallon by the first of January," said Steve Hanson of City Service Inc. in Kalispell. "We may see gas at $1.80 to $1.90."
Self-serve unleaded gas now averages $1.636 in Montana, up nearly 2 cents from last month, according to AAA's daily online fuel gauge report. The national average was $1.58 a gallon Thursday, about 9.1 cents below the all-time national high average of $1.659 on June 23.
The surge in prices is a direct reaction by oil companies to continuing increases in crude-oil prices, Hanson said. Retailers have been hit by a steady string of price hikes from refiners for nearly two years, and it's beginning to break some small operators.
"They are making zero margin and have been since January of 1999. It's been absolutely brutal," Hanson said. "You can only sell gas for so long at no profit. Some operators have hung on as long as they could."
City Service responded to the slim profit margin by closing its City Service East store on East Idaho Street and converting it into a 24-hour fuel center that takes credit and cash cards and requires no on-site employees.
Locally, self-serve unleaded gas is selling for $1.599 at most Kalispell stations, but has risen as high as $1.679 at some locations. Diesel ranges from $1.739 to $1.799. Prices are higher in Whitefish, where unleaded gas ranged from $1.639 to $1.739 per gallon.
The average price per gallon in Montana for self-serve unleaded peaked in July at $1.64.
High crude-oil prices are affecting the price of lubricants, too, Hanson said, and heating costs are being driven up as well.
"If we have any kind of hard winter, it could really inflame prices," he said.
Natural-gas prices are already at record levels, and the U.S. Department of Energy this week said heating costs will be a third higher on average this winter than last.
On a national level, oil and natural-gas companies are concerned that high prices for both kinds of fuel could trigger government intervention, possibly in the form of a tax on windfall profits. Industry executives attending an energy conference in Houston this week warned that any such action would have an adverse effect on supplies by reducing the incentive to find and produce more oil and natural gas.
At the same time, high fuel prices for both vehicles and heating could turn into a political brawl just before the general election, an Associated Press article said.
Vice President Al Gore proposed tapping into the government's emergency petroleum reserve to force down oil prices before winter.
Republican rival George W. Bush objected to Gore's
proposal, saying, "The strategic reserve should not be used as an
attempt to drive down oil prices right before the election ... for
short-term political gain at the cost of long-term security."
-- Martin Thompson (email@example.com), September 23, 2000