Wednesday, May 12, 2004

Fill 'er up? You sure?


Local gasoline prices at record

By James Pilcher
The Cincinnati Enquirer

Southwest Ohio and Northern Kentucky drivers hit uncharted territory this week, with average gasoline prices setting record highs Monday.

The prices in both states backed off a bit Tuesday, after flirting with $2 a gallon in Northern Kentucky the day before

"This always puts a hurt on your wallet," Lebanon construction worker Wally Patton said while filling his company truck at a Sharonville Speedway Tuesday, where prices were $1.99 a gallon for regular unleaded. "I mean your average raise is supposed to be 3 percent a year or something like that. The gas prices are going from $1.50 to $2 a gallon . . . my wages don't increase that much."

Tuesday's average prices for a gallon of unleaded were $1.87 in Southwest Ohio and $1.91 in Northern Kentucky, according to the Oil Price Information Service.

Monday, they nearly hit $2 ($1.999 in Northern Kentucky, breaking the old record of $1.94, set in May 2001. That region uses cleaner-burning but more expensive reformulated gas year-round to help meet clean air standards. Northern Kentucky switches to an even cleaner-burning formula for the summer on Memorial Day.

Monday, Southwest Ohio's average price was $1.96, beating the old mark of $1.91 set in 2000.

"We were seeing nearly $40 a barrel for oil and record highs on the New York exchanges last week, and it always takes a while to make its way to the street, and that's what we saw Monday," said Terry Fleming, executive director of the Ohio Petroleum Council, which represents oil companies in the state.

Crude oil closed Tuesday above $40 a barrel - the highest level since Iraq invaded Kuwait in 1990.

Andy Bushorn of Aurora said the higher gas prices haven't put a large dent in his family's budget yet but said those days are coming soon if they stay this high.

"It's pretty bad when this costs more than the meal we just ate," Bushorn said while filling up his Dodge Intrepid at a Speedway in Colerain Township Tuesday. "I don't know how anybody fills up a big car."

This region isn't alone in seeing record highs. Nationally, prices continued to climb, hitting $1.92 Tuesday. A spot check of prices around the country Tuesday showed these prices for unleaded regular:

• Boston - $1.90, a record.

• Chicago - $2.06.

• Houston, $1.78.

• Miami - $1.94, another record.

• San Francisco - $2.32, also a record.

The higher prices won't ease much this summer, the U.S. Energy Department said in a forecast issued Tuesday. The national average price will hit $2.03 a gallon in June, or 21 cents more than the department projected just last month. The national average for the whole summer will be $1.94.

Fleming said Tuesday's drop in local prices was probably due to market reaction after the Saudi Arabian oil minister said he wanted to see OPEC members increase oil production by 1.5 million barrels a day.

Last month, the cartel cut production by 1 million barrels daily. The cut, coupled with continued unrest in the Middle East over Iraq, sent oil prices to record highs, pressuring prices at the pump upward.

Fleming acknowledged that gas prices fall more slowly than they rise, meaning that signs with prices more than $1.90 will be fairly commonplace for a while.

"Still, they do go back down," he said. "Otherwise you'd see us paying $7 to $10 a gallon.

"Worldwide demand for this commodity has grown immensely, and has put a squeeze on the system. If you see a problem with a pipeline in Russia, you can feel it there in Cincinnati - that's the situation we're in."

Enquirer contributor Victoria Barber-Emery assisted in this report. E-mail jpilcher@enquirer.com




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