Gasoline heading to $3 and more...

[Guest]

Posted on Thu, Apr. 06, 2006 

Gasoline heading to $3 - or more

Drivers will face big increases again this summer as changes to regular and diesel fuel add to refiners' costs.

By Harold Brubaker

Philadelphia Inquirer Staff Writer

Spring is barely here, but gasoline prices already have begun climbing toward - perhaps to beyond - $3 a gallon for the summer driving season.

There is more at play than the usual anticipation of increased demand from vacationers. Oil refiners are working through major changes to the composition of gasoline and diesel fuel.

With crude-oil prices already $9 a barrel higher than a year ago, analysts expect the formulation changes will contribute to a fourth consecutive summer of record fuel prices.

In the last month, average gasoline prices in Philadelphia and the Pennsylvania suburbs have climbed by 30 cents a gallon, or 13 percent, to $2.60 a gallon, AAA Mid-Atlantic reported yesterday.

In South Jersey, the three-day average was $2.42, a gain of 36 cents, or 17 percent.

The federal government reported yesterday that gasoline inventories had declined for the fifth straight week, maintaining upward pressure on prices.

It is going to be "another summer of very volatile prices, with $3 within reach," predicted Ben Brockwell, editor in chief of Oil Price Information Services.

The Energy Information Administration said that both formulation changes had the potential to cause "regional supply disruptions with periods of increased volatility."

The first hurdle is the phaseout of MTBE - methyl tertiary butyl ether - which has been added to gasoline in Philadelphia and certain other areas of the United States to reduce air pollution.

However, refiners must still meet clean-air regulations, and can do that only by replacing MTBE with another clean-burning component.

Federally subsidized ethanol - which is also being touted as a renewable fuel that can help reduce dependence on oil - is the only viable choice, industry experts said.

Ethanol has been used as a clean-burning additive for years in some parts of the country, especially in Midwestern markets, but the massive shift to ethanol this spring in the Northeast and in Texas could strain the supply chain, even if there is enough ethanol to meet demand.

Plus, ethanol costs more than MTBE, putting further pressure on prices.

Valero Energy Corp., the largest U.S. refiner, estimated that removing MTBE from gasoline will reduce U.S. supplies by about 145,000 barrels a day - or about 1.5 percent of total U.S. supplies.

"That is like losing the gasoline production of three 100,000-barrel-per-day refineries - just as we head into summer driving season," said Mary Rose Brown, spokeswoman for the San Antonio, Texas, company.

The federal Energy Information Administration estimated that as much as 2.5 times more ethanol will have to come to the East Coast this year as last year, prompting questions about whether enough railcars and barges will be available.

Valero, which operates refineries in Paulsboro and Delaware City, Del., has been phasing out MTBE since last month, and received an air permit last week to begin storing and blending ethanol in Delaware City.

Buckeye Partners L.P., which operates a terminal in Malvern supplied by Valero's Paulsboro refinery, is converting a tank in Malvern for ethanol blending, said Jim Scandola, senior manager of transportation at Buckeye, of Emmaus, Pa.

Scandola said the second big change this year, switching to diesel with a much lower sulfur content, was a greater challenge for the fuel-transportation industry.

The regulation on ultra-low-sulfur diesel - 15 parts per million compared with 500 in the current formulation - is unusual in that the sulfur specification has to be met at the fuel nozzle, not at the refinery gate, as is typically the case.

The reason for this is that new diesel truck engines - starting in model year 2007 - must use ultra-low-sulfur diesel in order for new pollution-control equipment to work.

It is a challenge for pipeline companies because a single pipeline carries gasoline, diesel, home-heating oil, and jet fuel, one after another.

That creates the potential for sulfur from fuels such as home-heating oil to contaminate the ultra-low-sulfur fuel as it makes its way through the pipeline.

To prevent such contamination, pipeline and terminal operators are spending hundreds of millions of dollars on monitors and on other equipment to segregate ultra-low-sulfur diesel from heating oil and other products, Scandola said.

The regulation goes into effect for refineries on June 1, and must be met at retail by Oct. 15, with some allowances for higher-sulfur diesel for the next four years.

All these complications add up to a market that has plenty of reasons for commodity traders to jump at the least sign of trouble, driving prices higher, said Brian L. Milne, an editor with DTN, a business information company. He said: "They climb the wall of worry."

--------------------------------------------------------------------------------

Contact staff writer Harold Brubaker at 215-854-4651 or hbrubaker@phillynews.com. 

[Porsha911gt3 8]

Last time I checked most of the oil production is back in service since Katrina hit and the prices never dropped. Now after the "composition change" is made and the prices are 3 dollars a gallon, they'll come up with another excuse. I bet the price of a gallon goes up 1 cent from the "composition change" but they'll charge us an extra 50 cents. Why because they can.

Edited April 6, 2006 by Porsha911gt3

[fire2141 33]

Even though i consider myself a die hard republican, I feel that the current Whitehouse administration is pathetic. It's not just coincidental that the oil prices went up with along with this administrations personal interest in oil. You haven't heard to much from them in regards to some kind of price controls. As for the individual states. They get more tax money as the price of fuel goes up, so do the taxes expotentially.

Just my two cents.

[Guest WolfEMT]

And it's a bunch of crap that the removal of MTBE is what is driving up the prices. MTBE is only added to fuel between November 1 and February 28. Last time I checked, it was after February 28, so what's the real reason???

[Guest]

Oil Rises to 2-Month High as U.S. Gasoline Inventories Slip

April 6 (Bloomberg News) -- Crude oil rose to a two-month high and gasoline jumped on concern that U.S. refiners will fail to produce enough to keep up with peak demand this summer.

The amount of U.S. fuel-making capacity that is offline today is double a year ago, a sign refiners are struggling to catch up with maintenance work that was delayed by the hurricanes that struck the Gulf Coast last year.

The nation's gasoline inventories fell last week and are down 6.2 percent over five weeks, according to the U.S. Energy Department.

``There is a lot of nervousness about gasoline after the huge decline in supplies the last five weeks,'' said Rick Mueller, an analyst with Energy Security Analysis Inc. in Tilburg, the Netherlands. ``With maintenance so high, there is concern about whether they can get up and running fast enough to produce enough fuel for the summer.''

Crude oil for May delivery rose 88 cents, or 1.3 percent, to $67.95 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange.

Prices are up 22 percent from a year ago and are within $3 of the record $70.85 set on Aug. 30 after Hurricane Katrina.

Gasoline for May delivery rose 5.29 cents, or 5.3 percent, to $2 a gallon. Gasoline futures, based on wholesale prices, are up 21 percent from a year ago.

The U.S. average gasoline pump price has climbed 16 percent in the past six weeks to $2.588 a gallon amid concern that the lingering effects of last year's hurricanes and changes this year in fuel specifications might crimp supplies.

The U.S. pump price climbed above $3 a gallon for the first time in September.

Summer Demand

Refineries operated at 85.9 percent of capacity last week, down 1.1 percentage points from the week before, according to a report from the Energy Department yesterday.

Refineries were expected to operate at 87.3 percent of capacity last week, according to a Bloomberg News survey of 13 analysts. Plants utilized 93.7 percent of capacity during the same week last year.

Refiners usually perform maintenance in February and March and make other changes to prepare for rising summer gasoline demand, a period known as turnarounds.

``This is a sign that refiners are having a tough time with turnarounds,'' said Phil Flynn, vice president of risk management with Alaron Trading Corp. in Chicago. ``The new formulations are more difficult to make, which is making things worse. We can't afford for refiners to slow down as we prepare for summer.''

Peak Demand

Gasoline futures surged 21 percent in the past month on concern about the adequacy of supplies for peak demand in summer, when many Americans take to the highways for vacations.

Gasoline using MTBE, or methyl tertiary butyl ether, is being phased out. Refiners don't want to be liable for groundwater contamination caused by the additive and are switching to ethanol-blended fuel.

Implied demand for gasoline has averaged 9.1 million barrels a day over the last four weeks, 0.9 percent higher than during the same period last year, the Energy Department said.

[x648eng119 2]

Anybody wanna buy a trailblazer??

[27east 19]

Ok here is the thing -we have enough CRUDE OIL, we don't have enough GASOLINE. Why? Becuase we do not have enough refineries. There has not been a refinery built since the 1970s, 1976 I think. Now that we have to cave to the enviornmental lobby and not build new plants and then put all kinds of crap in the gas that makes it harder and more expensive to refine. Yes, Bush has too many ties to oil. This is probably a time for the governement to get in and try to do something. (No, releasing crude from the stockpile won't do anything.)

[Porsha911gt3 8]

Ok here is the thing -we have enough CRUDE OIL, we don't have enough GASOLINE. Why? Becuase we do not have enough refineries. There has not been a refinery built since the 1970s, 1976 I think. Now that we have to cave to the enviornmental lobby and not build new plants and then put all kinds of crap in the gas that makes it harder and more expensive to refine. Yes, Bush has too many ties to oil. This is probably a time for the governement to get in and try to do something. (No, releasing crude from the stockpile won't do anything.)

←

In addition, a lot of the additives may be better for the environment, but they hurt your gas millage alot. A lot of the additives burn faster which makes things even more expensive.

[Guest]

I guess this is a bad time to start learning to drive. I can pass the tests, but I don't have the green to drive a car!

I guess it's back to my bike, although I can't plug a blue light into that baby.

[Porsha911gt3 8]

I guess this is a bad time to start learning to drive. I can pass the tests, but I don't have the green to drive a car!

I guess it's back to my bike, although I can't plug a blue light into that baby.

←

So get 2 6V batteries and wire a rotator onto your helmet

[Guest]

We all want to spend less at the pump right ? Well, look at what Brazil has done !!!

80% of new vehicles sold there run on 100% ethanol from sugar cane !!!!

It's just a matter of making it a national US priority, like landing on the Moon in the 60s !!

Just think, every time you and I fill our tanks today we are giving that cash to Middle East dictators, terrorists, radicals, etc. They take that money and use it to buy arms and pay those who fight us. So, we are, for all purposes, being taxed at the pump for our enemies to get stronger with the oil sale $$ revenues !!! It's crazy!

You know what is the most patriotic thing we could do today?? Force our gvmt. to make the auto co.s buid vehicles to run on 100% ethanol. We can get plenty of sugar, reward Americans for planting it (and corn too) and they would even sell more cars in the long run !!!

Sorry about the rant but this has been bothering me for a while.... AND it ain't politics, just good old-fashioned common sense.

Brazil's sugar crop fuels nation's cars

By Guto Harri

BBC North America

business correspondent

in Sao Miquel dos Campos, Brazil 

Home grown fuel

More than 80% of new cars now sold in Brazil are equipped to use ethanol as well as gasoline.

Both fuels are available almost everywhere, and since ethanol can cost about a third less than petrol per litre at the moment (though the mileage is not quite as good), the home grown fuel is more popular than the foreign import.

President Bush has challenged Americans to break their addiction to oil, but it could take a decade for the US to catch up with the progress made here.

Oil would have to fall to $35 (£20) a barrel to compete with ethanol in Brazil.

That's roughly half the price that crude has been sold for over the last six months.

Export markets

Some of the countries producing black gold have become less co-operative, more volatile or violent in that time, and there seems little prospect of the price falling significantly in the near future.

Conventional motor vehicles that run purely on petrol are looking old-fashioned once again

Some in the sugar industry claim that the country has already been able to cut imports by $400bn by reducing its reliance on oil.

The focus now is on boosting exports.

Japan is considering a deal to import up to six billion litres of Brazilian ethanol by 2008.

More than 70 new mills are due to open by 2012.

Story from BBC NEWS:

http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/4715332.stm

Published: 2006/02/15 23:36:37 GMT

© BBC MMVI

Edited April 8, 2006 by hoss

[ajsbear 11]

The prices are increasing at unbeleivable rates. I saw 1 station go up 12 cents in one day. The station I go to just went up 10 and while I was there his supplier called and told him his delivery which was on the way was another 8 cents. Most of the gas in storage was refined 3 to 6 months ago.

What happened to the State gov't who said they were putting a cap on the state gas taxes. Some of the counties said the same. The taxes are based on a percentage of the selling price. They were supposed to vote in September on a tax cap. Everyone of the state senators and members of the assembly came out and talked about supporting it but look, nothing. Just like our representatives. Talk BIG before an election and do NOTHING.

I'd appologize for the rant but I know we're all suffering.

[fireboy 6]

I think it is ridiculous that gas is going up that high. Even now a half of tank costs you $40.

[JetPhoto 626]

I think it is ridiculous that gas is going up that high. Even now a half of tank costs you $40.

←

Joe Pesci once said in a movie "They F**K you at the drive thru" I think that has changed a little too "They F**k you at the gas pump!"

A Good website for tracking gas prices in your area is :

http://www.newyorkstategasprices.com/

Or

http://www.gasbuddy.com - for the site in your state.

Considering some areas had already banned MTBE a few years ago, why do those areas have to suffer again?

[CAM502 6]

Damn Hoss you stole the words right from my mouth. Brazil and other South American countries are leading the way to never using gasoline again. This is most definitely a path we must look to follow here in the US. I hate supporting Saudi princes and their fleet of BMW's.

Oh and 648 no thanks bro. It cost me $40 to fill my Ford Focus yesterday that was enough.

[FDNYDCHI 38]

I have been seeing on TV commericals aobut "think Yellow" or Drive yellow somthing like that and they show an SUV filling up at the pump with it. You can switch inbetween the two. regular Gas and this stuff.

[Guest]

FDNYDCHI, thanks for bringing up the "Yellow" campaign. I had forgotten about it.

It refers to E85 Ethanol, a blend of 15% gas and 85% ethanol from good ol' corn !! Gas stations in the Midwest and Texas are starting to sell it and some cars/trucks are being offered as "FlexFuel" (you can use both regular gas or E85).

It's great and I hope we see some chains offering it in the Northeast!!

8 Krogers in area to sell ethanol

Renewable fuel coming this summer to 18 of retailer's stations in Texas

08:23 AM CST on Friday, March 31, 2006

By ELIZABETH SOUDER / The Dallas Morning News

Kroger Co. will offer ethanol fuel at 18 gasoline stations in Texas, making the grocery store chain the largest retailer in the state of the renewable fuel and the only retailer in North Texas.

Kroger said Thursday that it will add E85 ethanol to eight stations in the Dallas area and 10 in the Houston area this summer.

The first North Texas store with ethanol will be a Kroger on MacArthur Boulevard near Interstate 635 in Irving.

Currently, Texas has only four stations that sell E85 ethanol, used in flexible-fuel vehicles.

But only one of those stations, CleanFuel USA in San Antonio, is open to the public, according to the Department of Energy.

Kroger said there are about 250,000 flexible-fuel vehicles on Texas roads.

"Kroger is excited to bring this innovative new product to Texas. We pride ourselves in being first in the market with new products," Kroger's Southwest Division president Bill Breetz said in a statement.

Kroger, of Cincinnati, which operates 60 supermarket gas stations in Texas, will offer ethanol at more stations if the fuel becomes more popular.

The company plans to charge less for the E85 ethanol than regular gasoline, and customers enrolled in the company's loyalty card program will get discounts.

E85 ethanol is a blend of 15 percent gasoline and 85 percent ethanol, which is made with corn and other agricultural products.

The fuel has lower-polluting emissions than gasoline but doesn't produce as much energy.

Ethanol users probably wouldn't get as many miles out of a gallon of ethanol as gasoline.

Kroger spokesman Gary Huddleston said the company expects to turn a profit on ethanol, but he declined to say how much Kroger will spend on the offering.

He said Kroger will add ethanol pumps at some stations and convert some gasoline pumps to ethanol in other places.

Kroger will buy the E85 from Abengoa Bioenergy, a Spanish company that sells renewable fuels and services. Abengoa's refineries in New Mexico and Kansas will supply the Texas stations.

[Ladder44 73]

what about that flex fuel stuff thats made from corn?

Edited April 9, 2006 by Ladder44

[Guest]

Ladder44, you read my mind !!!!

[Guest]

More stations to offer e85 gas

By Dave Stephens

The Hutchinson News

KANSAS

Kansas offers substantial tax breaks for people who buy alternative fuel vehicles that run on 85 percent ethanol gasoline.

But so far only 10 stations in the state sell the e85 blend.

Robert White, deputy director of the National Ethanol Vehicle Coalition, said he has dreams of the day when every consumer in America will have an e85 fuel station within a 10-mile radius.

E85 fuel - a mixture of 85 percent ethanol and 15 percent gasoline - requires a specially manufactured engine to burn and cannot be used in many vehicles.

Car manufacturers have been making flexible fuel vehicles - those that burn both e85 and regular petroleum - for about six years, and the option comes standard on many vehicles, including the 2007 Chevy Impala and the 2006 Dodge Ram 1500.

"It's starting to take off like wildfire," White said of fuel sales.

Although only 10 stores sell the fuel now, three more - including one in Sublette - will begin selling e85 in the next 40 days.

"We are confident we'll add another 20 stations in Kansas that will be online by the end of the year," he said.

White bases his claim, in part, on growing government support for e85 fuel.

In Kansas, purchasers of a new flex fuel vehicle who use e85 gasoline can earn a $750 state tax credit if they purchase 500 gallons of gasoline in the following two years.

The state's fuel retailers also receive a healthy incentive to offer e85 gasoline. Starting this year, a combination of state and federal tax credit will cover 70 percent of the cost of converting a regular fuel line into an e85 line.

And last week, the Kansas Legislature passed a bill lowering the tax on e85 fuel from 24 cents to 17 cents a gallon. That bill awaits Gov. Kathleen Sebelius' signature.

Steve Bird, owner of Bird's Express gas station and Bird Oil Company in Great Bend, installed an e85 fuel line at his station in August and said he, too, has fielded a lot of questions - and experienced a spurt in business.

Bird said e85's lower cost - about 20 cents a gallon - has made it more economical, even at lower miles-per-gallon rates.

He said customers average a loss of anywhere from one mile per gallon to as much as eight or nine miles per gallon, depending on the car.

03/29/2006; 02:35:11 AM 

[llm60 0]

There just getting ready for summer when gas is gonna hit $4 a gallon!!! :angry:

[27east 19]

See what Bush should have done was invaded Venezuela...you get your regime change (bye-bye Chavez) and then the war would actually be for oil.

Now how would the Democrats counter that???

And would someone please repeal damned those gas taxes????

[Guest]

23piraf, I'm glad you brought up Venezuela because, you're right, that maniac Chavez could easily bring our economy to a standstill. And our Govt. acts as if "we ignore the guy, he'll go away..." .

Well, he's one of our top 3 crude oil providers !!!! And that's why we got to put that corn and sugar to work! Without his oil cash, his trash talk would mean nothing....

Chavez rules out return to cheap oil

By Meirion Jones

Producer,

BBC Newsnight 

If you thought high oil prices were just a blip think again - Venezuelan President Hugo Chavez has ruled out any return to the era of cheap oil.

In an interview with BBC Newsnight's Greg Palast, Mr Chavez - who is due to host the Opec meeting on 1 June in Caracas - said he would ask the oil cartel to set $50 a barrel as the long term level.

During the 1990s the price of oil had hovered around the $20 mark falling as low as $10 a barrel in early 1999.

Analysis by the US Department of Energy (DoE) - seen by Newsnight - shows that at $50 a barrel Venezuela - not Saudi Arabia - will have the biggest oil reserves in Opec.

Venezuela has vast deposits of extra-heavy oil in the Orinoco. Traditionally these have not been counted because at $20 a barrel they were too expensive to exploit - but at $50 a barrel melting them into liquid petroleum becomes extremely profitable.

The DoE report shows that at today's prices Venezuela's oil reserves are bigger than those of the entire Middle East - including Saudi Arabia, the Gulf states, Iran and Iraq.

The DoE estimates that the Venezuelan government controls 1.3 trillion barrels of oil - more than the entire declared oil reserves of the rest of the planet.

He will ask the Opec meeting in June to formally accept that Venezuela's reserves are now bigger than Saudi Arabia's.

Mr Chavez's increased muscle will not go down well in Washington, which is deeply opposed to his government.

Ironically, by invading Iraq, George W Bush has boosted oil prices and effectively transferred billions of dollars from American consumers to the Venezuelan government.

Up to $200m a day - half of it from the US - is flooding into Caracas.

Mr Chavez is spending this on building infrastructure and increasing the minimum wage and improving health and education in the poor ranchos which surround the cities.

Mr Chavez is also spending billions in the rest of Latin America - exchanging contracts for oil tankers and infrastructure projects and buying up debt in Argentina and Brazil.

He has also spent some of the dollars which have come in from the US to support Fidel Castro in Cuba. In return Cuba has supplied the thousands of doctors and teachers who are transforming conditions in the barrios of Caracas.

Washington accuses Mr Chavez of buying influence in Latin America.

The Venezuelan president has repeatedly won democratic elections and the opposition operates freely although some members have been charged with accepting illegal foreign donations.

Nonetheless Bush's administration repeatedly targets Mr Chavez on human rights and finances his opponents.

Mr Chavez told Newsnight he was still concerned that Mr Bush had not learned the lessons of Iraq and would order an invasion to try to secure Venezuela's oil.

"I pray this will not happen because US soldiers will bite the dust and so will we, Venezuelans," he said.

He warned that any such attempt would lead to a prolonged guerrilla war and an end to oil production.

"The US people should know there will be no oil for anyone."

Story from BBC NEWS:

http://news.bbc.co.uk/go/pr/fr/-/2/hi/americas/4871938.stm

Published: 2006/04/03 11:54:58 GMT

[ny10570 745]

what about that flex fuel stuff thats made from corn?

←

AS of now there are no flex fuel station in the NY or even the tri-state area. Last I looked into it, there no plans for any stations in NY. I believe that when you figure out the cost per mile the flex fuel is comprable or even a little more than gas. The big attraction comes from being cleaner burning and helping to limit our dpendance on oil. The upside is that the estimates are that as E85 exapnds and consumption inncreases the cost should fall to where it will be cheaper than gas.

[JM15 386]

The reason that they are not making fueling stations in the northeast for the flexfuel vehicles is because there is no demand. The people in the midwest and texas petitioned to have them open. INFORMATION ABOUT E85 AND FLEXFUELS

[ny10570 745]

I take back what i said earlier. there are now two in upstate NY (along I-90) with plans for more. GM is aparently becomming heavily involved throwing their lobbying power behind it. Look for other states to follow kansas and start throwing tax breaks in on E85. There are also provisions in the works for E85 fueled vehicles to help offset the automakers lower fleet wide average GPM requirements.

[Guest]

Oil Rises to $70 in New York on Gasoline Demand, Iran Standoff

April 17 (Bloomberg News) -- Crude oil topped $70 a barrel in New York, nearing a record, on concern changes to U.S. gasoline content will disrupt supplies as the peak driving season begins.

Gasoline is trading close to a six-month high as U.S. refineries replace a chemical additive with ethanol to reduce pollution.

Oil also gained because of Iran's defiance of United Nations calls to stop enriching uranium.

``Gasoline tightness is worse than last year,'' said Tetsu Emori, a commodity strategist at Mitsui Bussan Futures Ltd. in Tokyo. ``That is the most important part of the oil price. The other is the geopolitical risk.''

Crude oil for May delivery rose as much as 68 cents, or 1 percent, to $70 a barrel on the New York Mercantile Exchange in after-hours electronic trading. 

Prices have climbed 14 percent this year.

Oil reached a record $70.85 on Aug. 30, a day after Hurricane Katrina swept onshore and damaged oil platforms and refineries along the Gulf of Mexico.

Nuclear Program

Iran last week said it has enriched uranium, a step needed to build nuclear power plants or weapons.

Iran is the world's fourth-largest oil producer and any cutoff in supplies might send oil prices higher.

Crude oil accounts for about 60 percent of the retail price of gasoline.

The Middle East country formed battalions of suicide bombers to hit U.S. and British targets should the Persian Gulf country's nuclear sites be attacked, the Sunday Times said, citing Iranian officials.

U.S. Republican Senator Richard Lugar and three Democratic colleagues yesterday called for direct U.S. talks with Iran to defuse political tension about its nuclear capability and address global concerns about energy supplies.

[ajsbear 11]

About the Flexfuel cars. GM announced they are making 400,000 of them this year. The more they sell of these the more demand for the fuel and you'll see more stations slling it. These cars can also run on regular gas as well.

As for the gas price, I was on LI yesterday where it seems the average price is $2.93. Up here in Northern Westchester it's already over $3 and not stopping. It'll be $3.25 by memorial day. I was in NJ Saturday and paid $2.55 a gallon. What happened to capping the taxes?????

[Jason762 2]

By Mark Ginocchio

Staff Writer

Published April 17 2006

In lower Fairfield County, the threshold is crossed.

Gasoline prices have reached $3 a gallon.

  Earlier this month, industry observers said that probably wouldn't happen until Memorial Day -- the unofficial kickoff of the summer driving season, when gas prices historically peak.

But a recent run-up in crude oil prices, caused by the nuclear ambitions of Iran and fears of a shortage of a new fuel additive, moved up the predicted date by seven weeks.

It isn't the first time motorists will be forced to pay $3 a gallon. In August, after Hurricane Katrina struck the Gulf Coast, gas prices surged beyond $3 a gallon for about a month.

This time, however, there's reason to believe the high prices will stick around longer.

When prices spiked after the hurricane, Martine Morette, 29, who paid $2.89 a gallon at the Stamford Gulf station Friday, said she thought they would fluctuate and eventually fall.

"But this has been a steady climb," Morette said. "They're not fluctuating. And if they do, I don't know how much lower they'll get."

If gas costs $3 a gallon and more all summer long, there will be effects, predicted Taylor Garland, 17, who was filling up at the Gulf Gas & Mart on East Main Street in Stamford.

"There are definitely going to be people with a lot less money in their pockets," Garland said.

The average pump price in Stamford Friday was $2.96 a gallon, according to The Advocate's survey of 12 stations. Four of the stations surveyed were charging $2.99 a gallon or higher. One yesterday was charging $3.05.

The Norwalk average was $2.88 a gallon.

In Connecticut, the average price Friday was $2.80 a gallon, according to AAA's daily fuel survey, which includes no gas stations south of Bridgeport.

Prices in lower Fairfield County are usually 15 cents to 20 cents a gallon higher because of the higher cost of living, higher rents for station owners and zone pricing -- a practice in which oil companies charge higher wholesale costs to station owners based on what the market will allow.

If steep prices continue all summer, it will create problems for consumers, said Ed Deak, a professor of economics at Fairfield University.

"There's going to be a greater weight on consumers when they're spending an extra $10, $15, $20 a week," Deak said. "It's problematic, even for those with substantial incomes."

Although demand has not been tempered so far, "it takes time for (motorists) to adjust," Deak said.

Observers think prices will remain high because oil traders are focused on the upcoming switch to ethanol, a corn-based fuel additive used in Connecticut, New York and California, but not the rest of the country.

Federal energy officials have said there could be a shortage of ethanol, which is driving up prices.

Deak said the country could import more ethanol made from sugar from South America, but the United States won't lift a 59-cent-per-gallon tariff on the additive.

The tariff has caught the attention of state officials. Gov. M. Jodi Rell called on the Bush administration to lift the tax on imported ethanol to lower prices in the short term.

Rell's pleas were echoed by U.S. Rep. Christopher Shays, R-Bridgeport.

"I don't care how ethanol is made, just as long as there is a way that (importing it) can help lower prices," said Shays, who thinks an "artificial shortage" has been created.

Copyright © 2006, Southern Connecticut Newspapers, Inc.

Edited April 17, 2006 by Jason762

[Guest]

Gov.Rell and Rep.Shays are right !! Lift that import tariff so we can get some of that Brazilian ethanol to our drivers !