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Archive for Tuesday, August 21, 1990

GASOLINE PRICES ARE RISING AGAIN

August 21, 1990

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Any stabilizing of gasoline prices may be over, almost before it began.

A spot check of service stations in Lawrence and Douglas County shows that gasoline prices are on the increase, and station operators and an oil company official said signs indicate that the upward price trend may continue.

Last week, officials in the industry said they hoped gasoline prices had stabilized after a sharp increase occurred soon after Iraq's invasion of Kuwait in early August. But any price stabilization that occured was short-lived.

In Lawrence and Douglas County, a spot check showed prices at the pump today for unleaded regular gasoline ranged from $1.49.9 at a full-service station to $1.19.9 at a number of self-service stations.

Most service station operators said the prices included about a 2-cent per gallon increase called in by oil companies either over the weekend or on Monday.

"Volatile" is how Dave Abshear, spokesman for Amoco Oil's district office in Overland Park described the gasoline price situation.

"We went up 2 cents Friday night and 1 cents in Kansas Saturday," he said.

SOME SERVICE station operators said it appears those increases may not be the last.

"The market on gas is going up," said Clyde Cramer, owner of Cramers Service Station, 1002 N.H. "The wholesale price is the highest it's ever been."

Although he said any discussion of future gasoline prices is speculative, Cramer said the pre-tax wholesale price for September futures on gasoline was $1 a gallon today. That's up from a 60-cent wholesale price per gallon before the Iraq invasion of Kuwait, he said.

He said no solid reason for the price increase can be found.

"Nothing happened in the trouble spot," he said. "Rumors . . . any little thing will cause futures to jump."

Cramer, who was selling full-service unleaded gasoline at $1.29.9 a gallon today, said if the wholesale price stays as high as it is now, that price increase will soon be reflected at the pump.

"It could jump up 10 or 15 cents more," he said. "But that's just speculation."

ABSHEAR SAID there was pressure for a price increase even before the Iraq invasion when OPEC began raising the price of crude oil. He said in June, OPEC oil was selling for $17 a barrel, and Monday it was selling for $28.53 a barrel.

"It's a significantly higher price, and gas is going to follow," he said. "But a lot depends on the signals coming out of the Middle East, and a lot depends on the neighborhood gas market."

A gasoline wholesale dealer in Douglas County who asked not to be identified, said his cost for unleaded gasoline has risen about 45 percent since trouble started in the Middle East in early August. And, he said, oil companies have restricted withdrawal from pipelines, making it impossible for him to build up inventory at a lower price.

He said he thinks major oil companies are making excess profits.

"And when you are working on the retail market, you either go broke or pass it on," he said.

ALLAN MORRISS, owner-operator of Morriss Standard Service at 10th and Church in Eudora, said his full-service price had increased a little more than 2 cents to $1.49.9 in the last few days. He said people continue to buy, but not at the rate they were buying before the price increases.

He echoed the concern of others about the lack of control service station operators have on the situation.

"I'm on the tail end of the chain," he said. "And the more it goes up, the harder it is for me to make a living."

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