Local News: 6/9/2000

Gas prices balloon in southeast Iowa

By Mike Augspurger The Hawk Eye

 Fuel: $1.69 doesn't buy what it used to.

Mark Gardner of Burlington at first didn't realize that gas was $1.69 a gallon Thursday afternoon at the Home Oil Shortstop.

"I didn't notice," he said. "I really don't want to look anymore."

The convenience store on Main Street -- and others in the Home Oil chain across southeast Iowa -- raised prices a dime overnight, which had followed a 3-cent increase last week.

Gardner was filling the tank on his boat.

"I used to be able to boat all day for about $5 or $6. Now it's about double that," he said.

Prices for self-service unleaded gasoline in Ottumwa on Thursday started at $1.60 per gallon and had climbed to $1.70 by early afternoon. In Cedar Rapids and the Des Moines area, it was around $1.67.

The price at a station in Wever was $1.64 and prices at Fort Madison stations ranged from $1.64 to $1.69.

Apparently, the Home Oil stations took the lead in the area, as prices at Wareco and Ayerco stations were a dime to 13 cents lower at noon Thursday.

By 5 p.m., the price was at $1.69 a gallon at all Burlington stations.

One gas station manager said sometimes his station "follows the leader" when it comes to raising or lowering prices. The manager, who asked not to be named, said his prices already were in the 6- to 7-cent profit margin, which is normal for most stations, before the price hike.

Will the price continue to go up or go down?

"I have no idea," said Lee Schissell of Home Oil's office based in Ottumwa. He declined comment on why the price was hiked a dime.

"Most of the state is moving up. We're seeing anywhere from $1.62 to $1.69," said David Downing, a fuel price expert for the Iowa Department of Natural Resources.

Officials say a number of factors are at play, including high demand, lower inventories, refinery problems, environmental regulations and concerns about OPEC.

Ward Lenz, an energy data analyst with the DNR, said the price that retailers are paying went up about a dime over the last week -- but in smaller intervals.

For customers, it was one big hit.

"It's like the dam breaking," Lenz said. "Instead of the price going up two to three cents a day like it has for them, the price will go up a dime in one day and everybody notices that."

Harry Parrish of Paris, Ill., who filled up in Cedar Rapids on Thursday while traveling through Iowa, said he couldn't really complain. He has been paying up to $1.79 a gallon in his hometown and around $2.20 in Chicago.

The statewide average for Iowa in May was $1.43, according to the DNR's monthly survey. Another survey will be taken June 15.

Prices climbed to a record in March when the statewide average was $1.50.

Dawn Carlson, vice president of the Petroleum Marketers of Iowa, said federal requirements for cleaner-burning fuel are a big factor in recent price jumps.

She says when refineries have to concentrate on cutting pollution, they have to stop production of their more general products -- regular unleaded and premium unleaded -- and put it into more specialty products that have to be used in St. Louis, Chicago, Atlanta or Los Angeles.

"When they do that, we're running into shortages around the county," Carlson said. "It's hitting the Midwest pretty good right now. There are terminals in Iowa that are completely out of some products."

Carlson said the same situation is occurring in Missouri, Wisconsin, Michigan and Kansas.

Carlson said she wouldn't be surprised if prices reached $1.80 this summer.

Meanwhile, people like Gardner hope for the best.

"I'll be glad when it goes down, if it ever does," he said.

The Associated Press contributed to this report.

http://www.thehawkeye.com/daily/stories/ln09067.html

-- Martin Thompson (mthom1927@aol.com), June 09, 2000