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The Daily



08-25-03: Gas prices rocketing

    The upcoming Labor Day weekend and a variety of other international issues have caused gasoline prices to skyrocket during the last few weeks.
    The average price of unleaded gasoline per gallon locally is $1.75, according to a random price check of 16 gasoline stations in Mercer and Auglaize counties. The lowest price at the pump could be found at Chickasaw Quik Stop at $1.67 per gallon. The highest price was $1.77, shared by seven different gasoline stations.
    The area average is 5 to 7 cents higher than prices posted this morning on the AAA Auto Club Web site for Dayton, Columbus, Cleveland and Cincinnati. The state average this morning was $1.67; the national average was $1.66, according to Ohio AAA Auto Club.
    Prices have climbed about 15 cents in the last two to three weeks in the Grand Lake St. Marys area.
    "Unfortunately, a lot of things are happening at the same time," explained Terry Fleming of the Ohio Petroleum Counsel in Columbus.
    Fleming said although the oil strike in Venezuela ended last December, the countries' production of oil has dropped from more than 70 percent to only 55-60 percent due to ongoing protest marches and "sick-outs" by workers there.
    Production problems in Nigeria and Iraq, other countries which supply oil to the United States, also have contributed to the rising gas prices in our country, he added.
    "Then there's the recent blackout," Fleming said, referring to the largest blackout in history that darkened eight states and Canada last week. "It (power outage) shut down two refineries in Toledo for two days."
    On top of that, a Detroit, Mich., refinery remains closed due to the blackout. Officials there are trying to bring the plant back up to full production slowly to keep within EPA guidelines, he said.
    "So right now, there is gasoline being shipped north from Ohio, Wisconsin and Indiana to make up for the shortage," he explained.
    Labor Day travel is expected to be heavier this year, AAA predicts, and also is helping drive prices higher, Fleming admitted. The same time a year ago, local average prices per gallon were $1.38.
    "When you have heavy demand, prices will rise," he said, calling the theory "basic marketing 101."
    The price of crude oil rose from $25 per barrel to $32 recently - causing an automatic 7-cent climb in gasoline prices per gallon.
    "Crude prices are always the deciding factor for bottom-line gasoline prices," Fleming said.
    He also noted the Organization of the Petroleum Exporting Countries (OPEC) recently decided not to increase production of oil.
    In defense of the oil industry, Fleming reminded motorists that about 45 cents per gallon currently is federal and state taxes, making the actual gasoline price approximately $1.30.
    "Some people are paying $2 per gallon for water at the store and not blinking an eye," he said. "And the poor guy at the gas station actually makes more money when the price is lower, it costs him less."
    Fleming asks drivers to have a little patience.
    "In September, we switch to winter gasoline reserves, which are less costly to refine and prices should go down somewhat," he said. "It's our next silver lining."


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