Northeastern blackout pumps up fuel prices

August 20, 2003|by TAMELA BAKER and BRIAN SHAPPELL

Just when you thought the Tri-State area got through last week's blackout unscathed comes news that a spike in gas prices is a direct result.

Chris Kelley, a spokesman for the American Petroleum Institute, said Tuesday that five or six refineries in the Northeast and Midwest were shut down as a result of the blackout, "and some didn't come back online as soon as expected."

The blackout also affected distribution of fuel, according to John White, a spokesman for AAA-Mid-Atlantic.

The nationwide average retail price for all types of gasoline was up by 5.7 cents per gallon Monday over the previous week, according to an American Petroleum Institute report. Monday's average price was $1.67 per gallon, which is 10 cents lower than in mid-March, when the war in Iraq began. But prices have risen about 15 cents per gallon since early June, the report said.


"The price of crude oil has been high for quite some time," Kelley said, "and demand is up and will remain high through Labor Day." Both factors contribute to higher prices.

The average price for a gallon of regular unleaded gasoline was $1.57 in Maryland and Pennsylvania, $1.50 in Virginia and $1.59 in West Virginia, White said.

The Energy Information Administration, part of the Energy Department, said the average price of gasoline was $1.627 a gallon in the government's latest survey Monday, nearly 24 cents a gallon higher than prices at the pump the same time a year ago.

Asked whether the spike might be short-lived, Kelley said "it's hard to predict these things."

Locally, retail prices for regular unleaded gasoline at the Sheetz and Exxon stations along South Potomac Street and the Texaco on Pennsylvania Avenue were $1.55 per gallon Tuesday afternoon.

The retail price for the same grade of gasoline at the Sunoco station on South Potomac Street, across from Prime Outlets, was $1.52 per gallon Tuesday.

George Burger, manager of Burger's Texaco at 890 Pennsylvania Ave. in Hagerstown, said he has noticed a recent, sudden increase in the cost of gasoline supply prices, but was unaware of the reason for the increase.

"I'd like to know myself," he said. "Ask the government; ask the oil companies. I've been around 35 years. They do what they want."

Burger said a load of regular unleaded gasoline cost the station $1.49 per gallon last week, but jumped to $1.51 per gallon earlier this week, with another increase possible in the coming days.

"There's nothing you can do about it - you can't sit here with a bunch of empty tanks," Burger said.

Burger said he makes approximately 4 cents per gallon and has, at times, sold gas at less than its cost to the station to stay competitive with corporate-run stations. He said it is difficult to keep up with such gasoline providers because they also have stores where they sell soda, food and cigarettes.

Not all suppliers have been affected by price increases.

Kim Donivan, owner of the Sharpsburg Pike Sunoco at 1450 S. Potomac St., said the cost to her station from its gasoline provider increased by 1 cent in the last week. Donivan said the station makes about 6 cents per gallon, and the price of gas there is set within a 6-cent margin, despite costs from suppliers.

"I don't think there's a need to rob the consumer - but I'm just a little guy," said Donivan, who has run the station since it opened one month ago. "Corporations do control the prices, but station owners also have a lot to do with it, too. It comes down to greed," she said.

Both Donivan and Burger said smaller, independently owned service stations do not make the majority of their money from selling gasoline. They make money by offering services such as auto repair, they said.

"I make more off a 20-ounce bottle of soda than a gallon of gas," Donivan said.

The Associated Press contributed to this story.

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