The Biggest Jump at the Pump
Tuesday, August 16, 2005
Motorists pulling up to the pump at the Cardinal Plaza Shell station in Springfield got a price shock several times last week. On Tuesday, the station owner bumped the price of a gallon of regular up 3 cents; on Wednesday, he nudged it 4 more cents. On Friday, he got bolder: His price jumped 23 cents.
The steady increases in Springfield -- and across the nation -- pushed up the average price of a gallon of gas by 18 cents in the past week, the biggest one-week jump since the Energy Department began compiling the data 15 years ago. The average national price of a gallon of regular was $2.55 yesterday, up 36 percent over a year ago.
"I'm just sick of it," said Stuart Kass of Bethesda after he passed an Exxon station yesterday on Old Georgetown Road and Democracy Boulevard selling premium for $3.11. "I'm running out of money and I need to pay the bills."
Prices are rising partly because drivers are taking to the road during the summer's peak travel period. The increased demand for gas comes as supplies have tightened and refineries are grappling with problems that have cut production, analysts said.
Crude oil prices, the biggest component of gasoline prices, have been climbing as well and remain above $66 a barrel. In recent days, gasoline prices on the futures market have shot up even faster than oil, and that has translated into the rapid surge in prices at the pump.
Gasoline prices could climb another 5 to 15 cents through Labor Day even if oil prices do not rise, analysts said. Prices should fall after the holiday, when demand typically drops, said Tom Kloza, chief analyst for the Oil Price Information Service of Lakewood, N.J.
"I absolutely do not believe we will stay at these numbers," Kloza said.
Still, some drivers are losing faith. Aaron Rehman of Springfield said it is time to sell his 2001 Chevrolet Tahoe; he said it costs $75 to fill the tank. "That's taking away from other stuff I need," said Rehman, a 22-year-old shipping and receiving specialist.
The extra money he spends on gas, he added, could go toward baby formula and clothes for his son, Malik, who was born Tuesday.
Gas station owners and their representatives said they are not reaping added profit as prices increase. The amount of profit a station makes can vary based on local conditions and competition. The Alexandria-based National Association of Convenience Stores, which represents more than 110,000 stores that sell gas, said many of its members are making about a penny, or less, per gallon.
Scott Brown, who runs the Shell in Springfield, said he has had little choice but to pass along higher prices he pays his supplier.
The past week's increases have been unparalleled in his career. "I've been here since 1969 and never has it gone up 30 cents in four days," Brown said.