Print

Email story

Comment

Email editor

Digging deeper

Experts say they see little hope for a reprieve as the falling dollar and rising crude prices push up the cost of tanking up.

By TAMARA EL-KHOURY
Published March 18, 2005

The average cost of a gallon of gas in Florida has surpassed the $2 mark, up 15 cents over the past month.

Nevertheless, state AAA officials said the increase probably won't stop most spring break revelers from trekking to the Sunshine State.

"Typically, leisure travelers have plans they make well in advance. There's a great deal of anticipation that goes with it and they're not going to let the price of gasoline impede their plans," said Gregg Laskoski, spokesman for AAA Auto Club South in Tampa.

Locally, the Tampa Bay area's average price for a gallon of regular unleaded gas was $2.056 Thursday, compared with $1.89 a month ago. Premium was at $2.269, up from $2.086. By comparison, the state average for regular was $2.096 Thursday, up from $1.945; the national average $2.055, up 16 cents.

The nation's drivers are paying a record high at the pumps. The last record was set last year on May 26 when a gallon cost $2.054. Although crossing the $2 mark may look daunting, when counting for inflation, record highs were set in the 1980s, Laskoski said.

Prices may be high but consumers are still paying. Compared with last year, demand rose last week by 2 percent, according to the Energy Department.

"I won't drive less. I'll probably drive smarter," said Petie Maguire, a commercial Realtor who said she fills the tank of her GMC Yukon twice a week. "Instead of making two trips to Ocala, I'll probably try to do everything in one trip."

However, Floridians aren't paying nearly as much for gas as people living in, say, Hawaii. (People like Maguire's 33-year-old son, whom she called Thursday on her cell phone while at a St. Petersburg Chevron station.)

"Vince, I have a question, what are gas prices now?" she said.

Vince reported regular was at $2.65 per gallon and reaching $3 in some areas of Hawaii.

Experts point to higher crude-oil prices as a cause of the jump in gas prices. This time last year, crude oil was trading at $37 a barrel. On Thursday, light sweet crude for April delivery rose to a new high of $57.60 per barrel during the day before settling at $56.40.

Prices also are traditionally higher in the spring as oil refineries make the transition from winter grade fuels to the more expensive summer grade fuels.

Then there's the weakness of the dollar.

"When oil is traded internationally, the prime currency in which it is traded is the U.S. dollar," Laskoski said. "Essentially, American consumers are paying a premium when they buy gasoline because of the weakness of the U.S. dollar." Although industry experts are weary of predicting which way the gas prices will go, they say they don't expect the numbers to drop soon.

"It doesn't look good for the summer driving season at this point," said James Williams, an energy economist for WTRG Economics in Arkansas. He said he thinks it will be a month or so before future price trends become clear.

To some extent, the effect on drivers is psychological.

"It's just one of those things," said Kevin Bakewell, a senior vice president at AAA Auto Club South. "You see that 2 before the decimal so it does shock you a little bit."

Todd Murrian, general manager of the St. Petersburg Chevron station on Fourth Street and 17th Avenue N, said he is noticing a switch among his customers from higher grade to lower grade fuels.

"Last year was the worst year we had as a general business," he said, "and I attribute that to the psychological impact of rising gas."

Tamara El-Khoury can be reached at tel-khoury@sptimes.com or 727 893-8318

[Last modified March 18, 2005, 00:42:17]