By James Pilcher and Mike Boyer
The Cincinnati Enquirer

Sandy Walker drives a Toyota Prius, which she says gets about 48 miles to the gallon. (Ernest Coleman photo)

The cost of a gallon of gasoline shot above the $1.60 mark across the Tristate this week - at some stations topping $1.70 - as gasoline prices continued a wild fluctuation.

Prices at the pump in Greater Cincinnati were the highest for mid-January in at least seven years.

In some areas, prices rose as much as 30 cents Tuesday and Wednesday before falling back a bit, leaving consumers and industry analysts wondering what is going on with gas. January is typically a tranquil month for gasoline prices as post-holiday demand drops off.

"It is indeed a roller coaster, with no rhyme or reason as to why it keeps going up and down," said Steve Harper, owner of Harper Oil Products of Florence, which operates eight convenience stores and distributes fuel to another 25 stations. "It's either they're selling below cost, or they'll sell it for a fat margin. There is no reasonable level right now."

Prices now "can change as much as 30 cents in one day," said motorist Charlie Rolph of Monroe, as he filled up at a Speedway on Cincinnati-Dayton Road in West Chester. "But what are you going to do? You have to keep driving," said Rolph, who fills up when prices are down.

Thursday's average for a gallon of regular unleaded was $1.58 in Southwest Ohio, according to Oil Price Information Service. The price was more than $1.63 a gallon in Northern Kentucky and $1.57 nationally. Locally, the "rack" price, or the wholesale price that distributors pay before selling it to retailers, was about $1.41, including tax.

That's not even close to June 2000, when area retail prices peaked at $1.90-plus, but it is the highest for January since at least 1997, which is when Oil Price Information Service began tracking retail prices for this area. The national average is the highest for January since the federal government began tracking retail prices in 1990, according to the Energy Information Administration.

On the surface, the key reason for the spike in prices at the pump would appear to be a recent run-up in crude oil prices to the $33-to-$35-a-barrel range on world markets. At this time last year, the price of a barrel of crude was about $26.

While many experts acknowledge that oil reserves are low nationally, causing a tighter gasoline supply, political situations abroad might be contributing to speculation in oil commodities markets that is driving prices up. Refiners also could be concentrating more on producing home heating oil, a seasonal product line adjustment.

But analysts say traders are speculating wildly on what might happen in coming months, and that the current surges should subside soon despite an apparent pledge from OPEC, the global oil cartel, not to increase production.

"There is no real reason" for oil and gas prices to be as high as they are now, said Dr. Kent Gilbreath, an economics professor at Baylor University who studies the oil and gas industry. "I think we are in a speculative bubble in this industry ... and I can't help but think that some folks are trying to seize a profit opportunity here."

In Greater Cincinnati, motorist shock at the gas pump depends largely on how much traveling the driver must do, and whether the vehicle is a gas guzzler or a gas miser.

Higher gasoline prices don't bother Sandy Walker of Lebanon that much. She figures she saves about $400 a year driving her Toyota Prius gas-electric hybrid sedan to her job as a registered nurse at Jewish Hospital in Kenwood.

"It's wonderful,'' she says. "I figure I get about 48 miles to the gallon.''

Walker is working on her third Prius in little more than two years. She recently traded in her 2002 model on a new 2004 only to total the car in an accident Tuesday. She is driving a Prius loaner from Kings Toyota in the meantime.

"If everybody did what I'm doing, there would be no gas shortage, and the environment would be cleaner.''

At the other end of the spectrum are owners of the $50,000-plus General Motors Corp. Hummer, which gets about 12 mpg.

Greg Meyer at Camargo Cadillac, the area's Hummer dealership, said, "I don't think I've ever had a Hummer buyer ask me what the mileage is.'' Hummer buyers typically are higher-income individuals who aren't concerned about paying 5 or 10 cents more for a gallon of gasoline, he said.

"Now, if gas gets to $5 or more a gallon, that's a different story,'' he said.

The real shock might come later this spring, when refineries switch over to making cleaner-burning fuels required in many areas for air quality reasons, including Northern Kentucky.

"It may be an even bigger peak later in the summer driving season in July and August, when demand is high and supply may not be able to keep up because the imported gas we use to make up the difference may not be enough," said Tom Kloza, publisher of Oil Price Information Service's oil and gas industry newsletter.

Enquirer contributor Jenny Callison assisted in this report. E-mail jpilcher@enquirer.com or mboyer@enquirer.com.