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Tinge of relief at pumps

Just in time for Labor Day, gas prices have eased back, and barring disruptions appear stable for the rest of the year.

By TOM ZUCCO
Published August 30, 2006


It has been a perfect storm. This time, perfectly good.

A trio of events — an Alaskan oil pipeline that wasn’t damaged as much as first feared, easing tensions in the Middle East, and a couple of potentially dangerous tropical storms that fizzled out — have combined to push gasoline prices down to their lowest level in months. And experts expect prices in the bay area to fall even further barring a major supply disruption.

The timing is fortuitous with the approach of Labor Day weekend, when AAA Auto Club South estimates a record 35.2-million Americans will travel at least 50 miles from home.

According to AAA, the average price of a gallon of regular gas in the Tampa Bay area Wednesday was $2.80, down about 15 cents from a month ago. And at some gas stations, including a Hess station in Clearwater, gas could be had Wednesday for   $2.63 a gallon, a price not seen since early April.

None of this would have been possible, petroleum industry officials say, if oil reserves had not been stockpiled earlier this year in anticipation of disruptions in oil production or delivery.

Disruptions that as yet haven’t happened.

It also helped that U.S. demand during the peak summer driving season, which concludes this weekend, wasn’t as high as expected.

“This is a classic case of why gas prices go up and down,’’ Dave Mica, executive director of the Florida Petroleum Council, said Wednesday. “The demand level wasn’t as bad as some had projected, and the supply was up a little bit.’’

But in the oil industry, Mica cautioned, what goes down can quickly go back up. Look no further than a year ago, when gas prices in Florida soared from an average of about $2.50 a gallon to more than $3 a gallon in the wake of Hurricane Katrina.

“We’re still in the height of hurricane season,’’ Mica said. “All you need is something to form up and cause somebody to think about the close of production in the Gulf of Mexico.’’

Barring a disaster or a spike in demand from countries such as China and India, prices appear to have stabilized.

The Department of Energy this month projected world oil prices to remain at about $70 a barrel for the rest of the year, meaning gas prices nationwide would be in the $2.60 to $3 range.

“If you have stability,’’ Mica said, “that lends itself to positive things in the market.’’

But while $2.60 for a gallon of gas may seem like a bargain, as recently as March of last year the price was $1.79.

As the price has crept up, the strain on consumers, especially small businesses that depend on transportation, has risen with it.


“Our business has definitely been affected,’’ said Peter Tillema, office manager at Dial-A-Messenger, a Clearwater courier service that employs about 10 drivers. “We’ve had to adjust our prices.’’


His service also has struggled to hang on to its drivers. Like most smaller delivery services, drivers at Dial-A-Messenger provide their own cars and buy their own gas. They are paid a percentage of the delivery fee.

“Our drivers are hurting,’’ Tillema said. “We’ve had a hard time keeping them.’’

Now, with gas prices easing, and with several of his drivers switching from larger vehicles to more fuel efficient models, Tillema thinks the crisis may have passed. For the moment.

“We watch the prices every day,’’ he said. “We know where the cheaper stations are. But it’s going to have to take a drop of another 20 to 30 cents to really make a difference.’’

So Tillema has been looking at bio-diesel fuel and electric vehicles. But if events change and gas is pushed to $3.50 a gallon and beyond, he’ll have to take more urgent measures.

“We’ll just have to put our prices up and see what our customers do,’’ he said. “I hope they’ll still be using us.’’

Tom Zucco can be reached at zucco@sptimes.com or (727) 893-8247.

[Last modified September 3, 2006, 12:01:46]


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