Gasoline prices reach record high Nationwide average of $1.54 per gallon marks largest 1-year rise, study shows

03/15/2000

By Terry Maxon / The Dallas Morning News

Gasoline prices in Texas and across the United States reached an all-time high this month as motorists faced their largest one-year increase in price ever, the American Automobile Association said Tuesday.

A gallon of regular unleaded gasoline nationwide averaged $1.543 at the self-service pumps, according to the survey - up 17.6 cents since mid-February and 57.3 cents since last year.

The previous high, unadjusted for inflation, came in April 1981, when motorists had to pay out $1.388 per gallon. That price would exceed $2.60 in current dollars.

For Lone Star drivers, a AAA-Texas survey confirmed what they already knew - gasoline prices have skyrocketed in the last month and year.

Unleaded gasoline jumped from an average of 89.1 cents a gallon in March 1999 to $1.475 this month in Texas, the state association said. Only a month ago, Texas motorists were paying $1.29 a gallon.

In Dallas, the price jumped from 91.5 cents a year ago to $1.494 this month, a 63 percent increase in a single year. In February, the price stood at $1.309.

But some relief may be in sight as the Organization of Petroleum Exporting Countries prepares to consider raising production and boosting the unusually low inventories of crude oil worldwide.

OPEC oil ministers are set to meet March 27 in Vienna, a year after agreeing to production cuts that dried up a glut of oil on world markets and led to the current tight supply of crude oil and petroleum products, including gasoline.

Crude prices have nearly tripled since late 1998 as inventories have fallen and demand has increased, peaking at $34.13 a barrel last Tuesday for April delivery on the New York Mercantile Exchange.

But amid growing indications that OPEC members will ratchet up production sufficiently to meet world demand, oil futures have been declining since. A barrel closed at $31.69 in Nymex trading Tuesday, down 7 percent from a week earlier.

Falling inventories

However, prices may be going back up Wednesday after an American Petroleum Institute weekly report on U.S. crude oil inventories. The trade group reported late Tuesday that stocks fell about 3.6 million barrels to 287.2 million barrels, a bigger decline than expected.

The AAA encouraged OPEC to increase crude oil production by at least 2.5 million gallons a day to rebuild inventories and meet current demand.

"Right now, AAA is taking the position everyone else has to take, which is wait and see until OPEC meets March 27," said Rose Rougeau, spokeswoman for AAA Texas. "Hopefully they'll increase production and prices will begin to decrease."

If there's anything for Texas motorists to be thankful for, it's that they aren't filling up in California. The average price of gasoline in Northern California was $1.83 a gallon, up 36 cents in a month. In Southern California, the average hit $1.77 a gallon, up 34 cents.

Eureka, Calif., motorists are paying $2 for unleaded regular, while San Francisco drivers are facing $1.90 gasoline. Los Angeles, by comparison, was a bargain at $1.65 a gallon.

The Southwest offered the cheapest gasoline at $1.499 a gallon. New England motorists were paying $1.563; mid-Atlantic motorists were paying $1.528; in the Great Lakes region, $1.56; and in the Midwest, $1.519. Including California, drivers in the West were paying $1.607 a gallon, the highest-priced region in the United States.

Even higher prices

The U.S. Energy Information Administration had warned Americans on Monday that prices will probably continue to rise in the coming months.

"EIA is currently projecting regular gasoline prices to peak at $1.56 per gallon this summer," John Cook, energy administration petroleum division director, told the U.S. House Subcommittee on Energy and Power.

"Price volatility can result in a 20-25 cent-per-gallon price surge such as those seen in California historically, which brings the price to $1.80 for a time. Although these prices are far from record highs in real terms, they have risen rapidly over a short period of time, attracting a great deal of consumer attention," he testified.

http://dallasnews.com/business/49248_GASPRICES15.html

-- Martin Thompson (mthom1927@aol.com), March 15, 2000