Frazzled by Fuel? Some say price spike hasn’t changed a thing
Published 12:00 am Monday, June 7, 2004
DEMOPOLIS – Gas prices across the Black Belt are continuing to teeter on the edge of $2 per gallon still below the national average of $2.06 on Friday.
Gas Price Watch, the nation’s consumer advocacy website for gas prices, surveys gas prices across the nation through volunteers who update local pump prices.
According its website, Santa Monica, Calif., was the nation’s highest for gasoline at $2.99 while Norman, Okla., was the lowest at $1.76 per gallon.
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Since December 2001, gas prices have surged from about $1.05 per gallon to a peak in early May of $2.06, according to the federal Department of Energy’s
Energy Information Administration.
The U.S. average retail price for regular gasoline decreased by 1.3 cents per gallon as of May 31 to reach 205.1 cents per gallon, 57.8 cents higher than this time last year.
This decrease comes after four previous weeks of price increases, and it’s the third week in a row the national average price has been over $2.
Government specialists say there may not be much relief in sight for consumers.
“Historically, retail gasoline prices have increased seasonally during spring, often peaking around Memorial Day. This year, prices have climbed steadily since the start of the year. From about $1.48 per gallon on December 29, 2003, the average retail price of regular gasoline in the United States increased 18 out of the next 21 weeks up to May 24, 2004, totaling a net increase of 58.6 cents per gallon, before dropping by 1.3 cents per gallon on May 31, 2004.
Consumers should not expect retail prices to fall back to prices seen before the recent increases. While prices could drop below $2 per gallon over the next couple of weeks, and may continue to fall thereafter, present market conditions do not provide a reason to expect prices to return to their level at the start of this year anytime soon,” the EIA’s This Week in Petroleum.
The DOE also reports, that despite the higher prices at the pumps, the demand for gas has continued to climb.
Demand for higher-gas use vehicles also appears to be steady.
Eutaw automobile dealer Shawn Castleman, who operates Legacy Pontiac-GMC, Inc., typically sells 15-20 new cars per month, about 75 percent of which are full-size trucks and SUVs.
“You would think the gas prices would have impacted sales of the full-size trucks, but it does not appear to be sunk in yet,” he said, noting only one customer in the past six weeks has traded a full-size truck for a smaller one for gas economy.
“I don’t know if people are convinced gas prices are going to go back or what, but we’ve had very little impact from the high gas prices,” he said.
Castleman said there’s really no rational explanation for the steady demand on larger, less-economical trucks.
“The vast majority of our sales are Yukons and Z71 trucks, and they stilla re even with gas increasing. I can’t complain, but it doesn’t make much sense,” he said. “Fuel at $2 per gallon is high, but so is a truck that cost $25,000 a few years ago now selling for $40,000.”
“I don’t want people to panic over the gas prices, and it certainly appears they are not,” Castleman said.