Article published May 03, 2007
GOING UP
Gas zooms past $3 a gallon; record prices blamed on refinery outages, inventory
By DAVID PATCH BLADE STAFF WRITER
Sticker shock at Toledo-area gasoline pumps put another hit on motorists yesterday as prices shot up to about $3.20 a gallon for regular-grade fuel at many outlets, a 20-cent increase on top of recent jumps that had put prices on the verge of $3.
“It’s a lot. I can’t believe how much it went up just from [Tuesday],” said Char Skellie, of Maumee, while she fueled up at a Speedway station on Airport Highway at Perrysburg-Holland Road in Springfield Township, where the regular price early yesterday afternoon was $3.199.
At least one area filling station, a Kroger outlet at Jackman and Laskey roads, posted a $3.219 price yesterday afternoon, but the $3.199 mark seemed to be where many were settling.
In some parts of the city, however, new prices about a dime lower — $3.089 to $3.099 — were posted yesterday afternoon.
If $3.199 becomes the prevailing local price, it will be the highest in Toledo’s history, exceeding the $3.159 mark that many stations reached briefly last summer.
After Hurricane Katrina in 2005, most Toledo stations set their regular price at $3.099, but some independent gasoline dealers briefly raised their prices for regular into the $3.30s, apparently out of supply-shortage fear.
Though no hurricanes threaten North American gasoline refining, analysts and Toledo-area wholesalers said refinery outages and overall declines in gasoline inventories in recent weeks have pushed prices skyward.
“A lot of refineries that are supposed to be coming online after maintenance shutdowns are having a difficult time starting up,” said Mike Evans, the executive vice president of Atlas Oil in Taylor, Mich., which operates or supplies fuel to Marathon and Clark stations in Toledo.
American gasoline demand has risen despite tight supplies, Mr. Evans said, with the current daily consumption of about 9.3 million barrels a day “more characteristic of midsummer” than midspring.
Mr. Evans’ company had quoted its retailers a wholesale price of $2.979 a gallon, including taxes, on Monday.
By yesterday, the wholesale price in Toledo was above $3 a gallon, said Geoffrey Lyden III, president of TrueNorth Energy, and that erased any hope of keeping local retail prices below that mark.
“Our costs are over three bucks now,” said Mr. Lyden, whose company operates 13 Shell stations in metro Toledo and has retailing and wholesaling businesses throughout northern Ohio.
While oil producers and refiners benefit financially from the tight market, Mr. Lyden said, retailers lose profit margin because of street-corner competition that encourages penny price cuts until major retailers decide to increase prices in big chunks to stem their losses.
“The thing that’s abnormal right now is the barrel price” for crude, Mr. Lyden said.
“We don’t control that and we don’t like it, but we bear the brunt of it,” he said.
Crude oil prices fell in both London and New York yesterday, but the weekly inventory report from the federal Energy Information Administration showed that refined gasoline supplies fell by about 1.1 million barrels as refinery utilization remained below 90 percent.
Gasoline stockpiles have fallen for 12 straight weeks and are 15 percent below February levels.
The U.S. Department of Energy, meanwhile, announced that it would cease buying crude oil for its Strategic Petroleum Reserve until the end of the summer driving season.
The announcement was expected to push crude prices down.
That step and a rebound in refinery production could soften the current retail prices, but Mr. Evans said he doesn’t expect a significant decline anytime soon because the public’s appetite for gasoline is strong.
“I don’t see it going down a whole lot. It’s just hard for us as Americans to cut back — me included,” Mr. Evans said.
“We’re a driving society. We consider it a blow to our freedom if we can’t drive whenever we want to,” he said.
Robert Mechanic of Sylvania said gasoline’s rising price has put a squeeze on his enjoyment of five Cadillacs he owns.
“It’s too high. I’ve gotta have premium and it’s killing me,” Mr. Mechanic said while fueling one of the Caddies at a Clark station at Dorr and Hoag streets. Premium grade cost him $3.399 a gallon there.
Mr. Mechanic predicted he’ll have to cut back on driving and make more use of “a little small car” he also owns, even though he’d rather partake of his more luxurious rides.
“I’m just trying not to drive so much,” agreed Franco Woods of Woodland Avenue, who put just $4 worth — 1.17 gallons — into his Cadillac at the same filling station.
“I’ve just got to go home,” he said.
Prices weren’t quite so quick to rise yesterday afternoon along Fremont Pike southeast of Perrysburg, where several motorists who heard about higher prices in news reports seized the opportunity to buy fuel for less than $3 a gallon.
“I thought I’d top off my car a little earlier,” said Nancy Jomantas, 44, of Perrysburg, while filling up on $2.979 regular at the Kroger on Fremont Pike.
Though she was paying less for gasoline than she might have elsewhere, Ms. Jomantas said she didn’t feel like she was getting much of a bargain.
“I mind every minute of it,” she said as she finished pumping $19.85 into her Buick Rendezvous that already had a little more than half a tank of gas in it.
At a neighboring gas pump, Chelsea McQuillen, 17, of Perrysburg had just spent $15.01 topping off her Jeep Liberty.
Though she wasn’t aware that some Toledo gas stations had jacked up the prices, it didn’t matter a whole lot because she said all the prices are excessive.
“I don’t even know what to say. It’s ridiculous,” she said.
Staff writer Erika Ray contributed to this report. Information from the Associated Press also was used.
Contact David Patch at: dpatch@theblade.com or 419-724-6094.
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