More pain at the pump

Md. gas prices on rise

average hits $2.93

May 01, 2007|By Nicole Fuller | Nicole Fuller,SUN REPORTER

It was a monster fill for Marc Fischer's Ford Excursion.

When the pump came to a halt yesterday at a Columbia Exxon gas station, the bill was a whopper: $91.61. And it might continue to grow.

The price of a gallon of regular gasoline reached an average of $2.93 yesterday in Maryland - a 28-cent jump over last month, according to AAA statistics. Nationally, the average price of a gallon of gas is $2.95.

While prices are down slightly from the statewide average of $3.02 at this time last year, increases are expected to continue, analysts say, as demand for gasoline rises during the busy summer months - from Memorial Day to Labor Day - when Americans traditionally take to the roads in high numbers.

Despite the spike, prices are still below Baltimore's record of $3.31 on Sept. 6, 2005, days after Hurricane Katrina battered the Gulf Coast. California topped the nation's average per-gallon price yesterday at $3.40, while New Jersey's $2.76 per gallon was the lowest.

But officials with AAA Mid-Atlantic and some analysts dismissed claims in a recent Bloomberg News report that became fodder for hysterical cable news talk shows, predicting gas prices could top $4 per gallon this summer.

"Any attempt to accurately predict the price of gasoline at a specific point in time is an irresponsible endeavor because numerous variables influence gasoline prices," said Ragina C. Averella, manager of public and government affairs for AAA Mid-Atlantic.

"Area motorists and gasoline merchants should not panic in response to this `Chicken Little' school of thought as the sky is not falling. Barring worst-case scenarios that are unpredictable - a major hurricane striking the U.S. Gulf Coast, shutdowns of major oil refineries or pipelines, or escalating geopolitical tensions in the Middle East - gasoline prices should level off this summer."

Bill Veno, a director in the global refined products group of Cambridge Energy Research Associates, an energy consulting firm in Massachusetts, said short of a huge hurricane or terrorist attack, $4-a-gallon gas is unlikely.

"We'd have to have a catastrophic situation," Veno said. "You would need to have a serious supply shortage in a shock kind of environment."

The rise in prices can be attributed to a number of factors: a sharp increase in the price of crude oil, operational problems at refineries that have caused a decrease in production, a slump in European imports and geopolitical concerns over relations with Iran, Nigeria and Venezuela, said Rayola Dougher, a senior economic analyst at the American Petroleum Institute in Washington.

The price of crude oil - a major indicator of gas prices - has risen steadily to $66 per barrel, from $50 in January, Dougher said. At the same time, American refining capacity is down to 87.6 percent, from 90 percent last year at the same time.

According to an Opinion Research Corporation survey conducted for the nonprofit Civil Society Institute think tank and its 40MPG.org project that is scheduled to be released tomorrow, most Americans think they are being gouged at the pump and say they will cut back on their summer travel plans and general spending if fuel prices reach $3.50 per gallon.

A recent AAA transportation poll shows 50 percent of Marylanders said they would change their driving and transportation habits due to surges in gas prices.

Of that group, 84 percent said they "curtailed driving or drove a more fuel-efficient vehicle," according to the poll.

The numbers were more startling when examined geographically - those living in Western Maryland (67 percent) and the Eastern Short (63 percent) were more likely to change their driving habits due to higher gas prices than those living in Baltimore or Annapolis (48 percent).

AAA recommends combining errands, taking mass transit if it's an option, and keeping tires properly inflated to maximize mileage. But Fischer, who may soon spend $100 to fill his gas tank, said he isn't likely to change his driving habits.

"I don't think you have a choice," said Fischer, an Eldersburg commercial buildings manager. "It's not like you can say you're not going to go to work."

Dr. Paul Bajaj pumped $50 of gas into his Volvo yesterday and lamented that the rising prices are putting a major dent in his wallet. Bajaj, who lives in Ellicott City with his wife, will soon begin working at a hospital in Northern Virginia. And his wife, also a doctor, commutes to her job in Hagerstown.

Bajaj calculated their monthly gas bill at close to $800.

"It is sort of ridiculous at this point," Bajaj said. "In general, when we drive, it's a complete necessity."

nicole.fuller@baltsun.com

For more stories about gas prices, go to www.baltimoresun.com/gasprices.

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