Gas prices jump by 20 cents a gallon

Gasoline prices at many Kanawha Valley stations have blown pastthe all-time local record with a leap of 20 cents a gallon.

In South Charleston, the price at several high-volume stations offInterstate 64 jumped from $2.99 to $3.19 on Thursday. The price atseveral stations around the Capitol moved up to $3.05. The price atstations in Kanawha City ranged from $3.05 to $3.15.

The highest average in West Virginia was $3.05 for a gallon ofregular, set Sept. 5, 2005, according to AAA.

AAA's Daily Fuel Gauge Report, which measures gas prices, isn'tyet showing an average that beats that mark. Nevertheless, manyindividual stations have zoomed right past the record this week.

According to the fuel gauge report, the average price for a gallonof regular gas in West Virginia today is $3.01, up a nickel sinceThursday and up 28 cents from a month ago. The average price in WestVirginia today is the highest since last June.

Today the average price is $3.04 in Ohio, $2.92 in Pennsylvania,and $2.88 in Virginia, according to the AAA. It is $2.96 in Marylandand Kentucky.

California has the highest average price today - $3.45 - whileSouth Carolina has the lowest, $2.82, the auto club said. The AAA'sDaily Fuel Gauge Report is posted on the Internet atwww.fuelgaugereport.com.

Gasoline demand in the United States is running high relative toseasonal norms while refining capacity in the United States and theworld is tight, the Energy Information Administration said in areport issued Wednesday.

Jan Vineyard, president of the West Virginia Oil Marketers andGrocers Association, said today, "Analysts think the market forgasoline is likely to remain tight and that prices will thereforestay high.

"Many analysts are concerned gasoline supplies won't be adequateto meet peak demand during the summer driving season, which beginsMemorial Day weekend. And that means prices will likely continuerising until gasoline inventories increase."

AAA spokesman Greg Beheler said, "I scoured the Internet Thursdayfor a nugget that would say why gas prices are jumping so high andcould not find anything except a little story that said refineriesare at maximum capacity and demand is such, they just can't make anymore.

"Motorists expect gas prices to increase somewhat during thesummer travel season but that's between Memorial Day and Labor Dayand we're not there yet," Beheler said. "Prices certainly are peakinga lot sooner than we motorists anticipate.

The national average price, $3.01 a gallon, mirrors the averageprice in West Virginia.

"We're getting very close to AAA's highest recorded (average)price, $3.05, which was Sept. 5, 2005," Beheler said. That spikeoccurred in the wake of Hurricanes Rita and Katrina.

The price of crude oil is watched closely because, according tothe Energy Information Administration, it accounts for about 55percent of the gasoline pump price.

"When I see prices spike like this, one of the first things I dois look at crude oil prices," Beheler said. "Usually when we see gasprices spike, we see that crude oil is up." But that's not the casethis time.

Crude oil for June delivery closed at $63.15 a barrel Thursday onthe New York Mercantile Exchange. Although that's well above the $50-per-barrel price seen in mid-January, it's down from recent highs.

The fact the price of crude is not spiking indicates there areother reasons causing the price of gasoline to jump, Beheler said."It's probably large demand with limited supply. Everything I've beenable to read suggests refineries are reaching capacity. That's astrain - a real chokehold on this. As we enter the summer drivingseason, it will be interesting to see where gas prices go from here."

The Energy Information Administration attributes the higher priceto recent cold weather in the U.S., which boosted heating fueldemand, and the effect of production cuts by the Organization ofPetroleum Exporting Countries, commonly known as OPEC.

"Just a week ago I remember reading in an online publication thata lot of industry analysts said it's just a matter of time before gasprices reach the $4 level," Beheler said. "I read that with somedoubt. But with a start to the summer driving season like this, itlooks like their predictions are in the realm of possibility."

Beheler said high gas prices have been the favorite topic of watercooler conversations among his circle of friends for quite some time,"yet I haven't seen a whole lot of driving behaviors change. It'll beinteresting from here on out to see how gas prices affect ourbehavior in terms of driving day to day and vacations. I was readingrecently that this won't affect the economy too much. I think that'syet to be seen.

An increase of 20 cents a gallon only translates to a few dollarsmore for a thankful of gas, but over an extended period, "it startseating into people's discretionary income," he noted.

Contact writer George Hohmann at business@dailymail.com or 348-4836.