Gas prices could linger
By Natalie J. Mikhail
State Editor
Wisconsin gasoline prices reached their peak this weekend, but they could stay high for another few weeks.
Labor Day marks the end of the summer travel season and a decrease in demand on gasoline, usually allowing the oil industry to build up its product reserves. However, supplies remain tight because several refineries in the Midwest are scheduled to shut down for maintenance.
Earlier this summer, a power failure that some analysts called the biggest electrical blackout in human history left eight refineries in the upper-Midwest and Eastern seaboard without power for four days.
Exxon Mobil Corp. also announced Aug. 25 that it was unexpectedly shutting down a refinery in Joliet, Ill., for an unspecified mechanical failure. Although the gas is not sent to Wisconsin, it offers a further blow to an already tight market, George Gaspar, an oil analyst with Robert W. Baird & Co. in Milwaukee, said.
“Gas inventory is at a three-year low,” Gaspar said. “And we won’t see its prices down until late September.”
Gasper said the week of August 22 showed a supply of 194,264 million barrels of oil. This is 5.2 percent off the year-to-year supply.
“It was a sudden situation,” he added.
Wisconsin gets its gas supply from the Gulf of Mexico, but because of the blackouts, inventory from the state’s gas suppliers was spread throughout the country. This left lower than normal supplies for many regions.
But there seems to be some light at the end of the tunnel. As American troops fight to restore a national infrastructure in Iraq, oil production is stepping up, and analysts expect this increase in supply will help lower some of the costs.
American Automobile Association of Wisconsin spokesman Michael Bie calls high gas prices “a nuisance and an inconvenience,” but he says it will not impact people’s driving plans. The Association estimated 33.4 million people traveled in the United States over the Labor Day weekend.
American Automobile Association Wisconsin also reports the state’s current average price of regular unleaded gas to be $1.82. A year ago it was $1.48.
“Prices are what they are,” Gasper said. “We’re going to have to deal with it.”
To add to financial troubles, Wisconsin has the second highest tax on gas, about 31 cents per gallon.
Bie says there are some tips to conserve gas and keep personal prices down. Drivers should use the right grade of gasoline. Contradictory to the Federal Trade Commission’s recommendation, premium is not always the appropriate gas to use.
“Frankly, it has no benefit, and it costs a lot more,” Bie said.
He also suggests to take away any excess weight and to keep tires at the appropriate inflation level. These create drag and burn more fuel, but the biggest tip for drivers is to slow down.
“Now we hope to see the prices fall because demand is down and summer travel is over,” Bie added.
