September 3, 2005 in City

Gas prices up, but not worst

Richard Roesler Staff writer
 

OLYMPIA – If you bought gas in the Inland Northwest recently, odds are that it was made in a Billings refinery from crude oil piped in from Canada.

Neither of those places is anywhere near the hurricane-battered Gulf Coast. But as drivers are discovering day by day, being far from the damage doesn’t mean the region will be unaffected by rising gas prices. The storm halted 90 percent of the Gulf’s oil production, and ripples of that shortage are pushing up gas prices here.

According to the AAA, average gas prices in the Spokane area rose a nickel overnight Thursday to $2.83 for a gallon of regular unleaded gas and $3.08 for premium.

In Coeur d’Alene – where the state gas tax is lower – prices were up more than 6 cents overnight, to an average of $2.72 for regular and $2.95 for premium.

“If you have a shortage someplace, no matter how far from the refineries, it can affect the price,” said Dave Overstreet, a AAA spokesman in Spokane. “The whole system is interconnected, and it’s going to have an impact.”

The good news: That impact may not be as bad here as elsewhere. While the Northwest may not be immune to market forces, experts say, it’s likely to be sheltered from the worst of the price spikes that spawned headlines and anger in the Southeast and Midwest.

Late Friday afternoon, www.gasbuddy.com – a Web site that uses volunteer spotters to record high and low local gas prices – was reporting highs well over $3 in much of the Southeast. A gallon of regular unleaded cost as much as $3.29 in Birmingham, Ala., and Little Rock, Ark., according to the Web site. In Knoxville, Tenn., the highest price was $3.59. In Atlanta, it was $3.99. There were reports of gas shortages at a few stations in Georgia and Virginia.

Normally, the price situation’s reversed. There are just five refineries in Washington state and none in Oregon. As a result, gas prices in the Northwest tend to run higher than in most of the rest of the nation.

“This is kind of unique,” said Washington Assistant Attorney General Donivan Irby. “The last numbers that I saw indicated that Washington is currently running lower than many parts of the nation.”

It’s unclear how much of the current price increase here can be laid at the feet of Hurricane Katrina, which knocked out oil rigs and pipelines off the coast of Louisiana. Weeks before the storm hit, the prices of crude oil and gasoline were already rising fast. Prices in Washington and Idaho have gone up by an average of more than 40 cents a gallon in the last month, according to the AAA’s fuel price report, at www.fuelgaugereport.com.

But the storm clearly didn’t help. The nationwide average gas price Monday was about $2.69 per gallon, Overstreet said. By Thursday, it was $2.78 and rising.

For now, motorist groups and government officials are urging people to resist the urge to race out and top off their tanks. That will worsen things by driving up prices, Overstreet said.

“Conserve and carry on,” he said.

Also, gas companies may favor their own branded stations during a situation like this, he said. If name-brand stations can get gas more easily than their non-brand competitors, the prices may be lower at name-brand service stations, Overstreet said.

“It’s the opposite of what you’d normally expect,” he said.

There is little that authorities in Washington can do to combat high gas prices, Irby said.

The state’s antitrust attorneys can battle illegal price-fixing between supposed competitors, but there is no Washington law banning price-gouging during a crisis.

“Honestly, we have not seen that like they have in other parts of the country,” he said.

Nonetheless, Attorney General Rob McKenna announced Friday that he’s joining a multistate investigation into the reasons behind recent price increases.

“So far, however, we have seen no evidence that Washington gas producers or retailers are violating state consumer protection or antitrust laws,” McKenna said.

Also Friday, the United States and various European countries decided to tap 2 million barrels a day from oil and gas stockpiles, in hopes of helping steady fuel prices and preventing gas stations from running dry.

Meanwhile, two Gulf Coast refineries shut down by the storm are resuming operation, and another may restart next week, according to the Energy Department. The storm and loss of power shut down nine refineries, leaving two of them with major damage that’s expected to take weeks to fix.

Despite tight supplies, the panic buying that had struck some markets appeared to have settled down. The long lines seen at midweek at downtown Atlanta gas stations were gone by Friday, although some pumps were still closed.

Locally, prices could stay high, at least for now, Irby said.

“I would not expect gas prices to go down in the next week,” he said. “Longer term, I have no crystal ball.”


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