Archive for Tuesday, April 24, 2001

Gasoline outlook fuels concern

April 24, 2001

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Rising gasoline prices are taking a toll on Chicago cab driver Adam Kowski, who spends $26 a day at the pump.

"I am losing my money, my hair and my patience because of gas prices," Kowski said. "It's a taxi driver disaster."

With the start of the peak driving season still more than a month away, the average price of gas is already up sharply. So is the frustration of many drivers, who wonder why the annual ritual of rising prices has begun so early.

Motorists in California and in Midwestern cities will pay the most at the pump in coming months because of shortages of a blend of gasoline that produces less smog, which is required by the federal government during the summer.

The average price of gas, including all grades and taxes, is $1.66 a gallon, up 12 cents in the past two weeks, according to data released Monday by the Energy Information Administration, a division of the Department of Energy. A year ago, the average was $1.48 a gallon.

Analysts think once the peak driving season arrives, the nationwide average could rise another 20 cents, with prices reaching $3 a gallon in parts of California and in cities such as Chicago and Milwaukee.

"Gasoline inventories in this country are at a level associated with the end of the driving season, not the beginning of it," said John Kilduff of Fimat USA in New York.

During the winter, when gasoline inventories are typically replenished in anticipation of summer, major refiners focused instead on producing enough heating oil.

The industry also contends that the problem has been created, in part, by environmental regulations that make it difficult to build refineries. No new refineries have been built in the United States for more than two decades.

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