Hang on, drivers! Gas bill still rising

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Hang on, drivers! Gas bill still rising Todd Pack of the Sentinel Staff

Published in The Orlando Sentinel on March 02, 2000

You think gas costs too much now? Wait a couple of weeks.

Prices at Orlando-area pumps could rise 10 cents a gallon, maybe more, by St. Patrick's Day.

And it might not stop there.

Some analysts are predicting that, unless oil production increases, gas prices will reach $2 a gallon.

Today, the average price of regular unleaded gas statewide is $1.38. It's expected to climb to $1.50 a gallon by March 17, but tight supplies and high demand could push prices even higher, said Tom Kloza, a director for OPIS Energy Group, a Lakewood, N.J., company that tracks fuel prices nationwide.

Expect at least $1.60 a gallon by the end of the month, Kloza said.

"That's scary," said Yoli Buss, director of traffic safety for AAA Auto Club South.

It's scary because it would mean a 22-cent rise in the price of gas in one month, she said, pointing out that prices are up 40 cents a gallon on average from a year ago.

When you account for inflation, gas is cheaper now than it was in 1981, when the average price for unleaded regular also was $1.38. But in today's dollars, gas would have to approach $2.60 a gallon to have the same effect on a driver's pocketbook.

Still, the prospect of $2 a gallon sounds like a lot of money to consumers, and it could dampen Central Florida's summer tourist season, AAA spokesman Jerry Cheske said. Gas is one of the least expensive items on the typical family's vacation budget, but high prices could persuade some out-of-state tourists to take shorter road trips.

Gas prices are up because oil-exporting nations deliberately slowed production. Oil prices have tripled in the past 14 months, reaching a nine-year high of $31.77 a barrel Wednesday on the New York Mercantile Exchange.

Some members of Congress want to release oil from the federal emergency reserve to ease supplies and high prices. Rep. Benjamin Gilman, R-N.Y., introduced legislation Wednesday that would bar military assistance to any oil-exporting nation involved in price manipulation.

But with oil-exporting nations apparently poised finally to increase production, the Clinton administration is urging lawmakers to let diplomacy work.

"We have to play it smart" and not overreact, Energy Secretary Bill Richardson told the House International Relations Committee. He was optimistic that OPEC producers would boost production and ease what has become a 2 million-barrel-a-day oil shortfall worldwide.

Such a move could bring gas prices down to about $1.25 a gallon, experts said.

Officials from Saudi Arabia, Venezuela and Mexico are scheduled to meet today in London to work out a plan for an increase that would be presented March 27 at a meeting of members of the Organization of the Petroleum Exporting Countries.

The current fuel crunch is hardly a replay of America's worst energy crises -- the first time a lot of people had ever heard of OPEC.

First, today's cars get a lot more miles to a gallon than the tanks people drove in the 1970s. What's more, the overall economy is strong.

Federal Reserve Chairman Alan Greenspan told Congress last month that, with the sole exception of rising oil prices, he can't find a whiff of inflation.

However, Richardson said the current restrictions on production have depleted supplies to a point that global economic growth is at risk. But he said "the odds are good" that the OPEC countries will increase supplies

http://orlandosentinel.com/automagic/news/2000-03-02/NWSRELIEF02030200.html

-- Martin Thompson (mthom1927@aol.com), March 02, 2000


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