Gasoline as good as gold
Expanding prices shrink wallets
April 22, 2006
Katelyn Stokes cringes every time she pulls into a gas station.
A full tank of gas for her 1991 Chevrolet Suburban can cost $90, a lot of money for a high school senior.
“I definitely have work a lot because most of my money goes to gas,” she said. “Sometimes, I get enough spending money to eat.”
Stokes isn’t the only one eyeing the pump. Across the nat—-ion, people are pay—-ing record prices for a gallon of gasoline.
Colorado is no different.
According to AAA Colorado, most Coloradans are paying at least $2.80 for a gallon of regular unleaded gasoline. Gas in Denver is costs $2.77, and residents of mountain communities such as Steamboat Springs, Glenwood Springs and Vail are paying nearly $3 a gallon.
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AAA Colorado spokeswoman Alexa Gromko said gas prices have been on the rise for months.
“(Gas prices) have been steadily increasing since the start of the year,” she said. “We’ve just seen it jump by leaps and bounds since March.”
Gromko said gas prices always rise when spring rolls around and families begin planning summer road trips and vacations.
In addition to gas prices rising to accommodate the summer travel season, Gromko said there are three other main factors that are playing into rising costs.
One of the main reasons gas prices are rising is because the federal government is pushing refineries to replace the chemical component methyl tertiary butyl ether (MTBE) with ethanol.
MTBE is a chemical that has been used in gasoline for the past two decades; however, MTBE is not clean-burning and pollutes groundwater. Government officials have told national refineries they must be in compliance by removing all MTBE from gasoline by May 5.
Ethanol burns between 95 and 99 percent cleaner than MTBE. “The government, the people concerned with the environment, they want that ethanol in there,” Gromko said.
Because there are so few ethanol plants in the U.S. and because ethanol costs more to make, refineries charge more, retailers charge more and consumers pay more.
Prices should fall after ethanol production catches up with demand, Gromko said.
The other factors that are playing into gas prices are geopolitical instability and the lingering effects of Hurricanes Rita and Katrina.
Gromko said political tensions in Nigeria, Iran and Venezuela concern oil traders and are pushing the cost of a barrel of oil to nearly $80.
“Whenever there is worry and fear on the international level, prices go up. When oil prices go up, that has a direct effect on gas prices. We can pretty much count on it,” she said.
Americans also are paying more for gas in April because of the hurricanes that ripped apart the southern U.S. last year. Several oil refineries that were damaged when the hurricanes hit still have not returned to full capacity.
Gromko said prices are expected to reach $3 by Memorial Day.
For Stokes, paying $3 for a gallon of gas is something she knows she won’t be able to avoid. “I will be graduating soon, moving out. I can’t depend on anyone else to get me around. I guess it is just something I am going to have to do,” she said.
Stokes’ Suburban gets about 11 miles to the gallon she said. “If I could, I’d be driving the smallest car I could,” she said.
Gromko says cutting back on driving is the best way for consumers to save a little money.
“If you don’t have to drive, don’t do it. There’s no excuse not to take public transportation or ride a bike,” she said.
The good news? Gromko said experts are predicting gas will fall between 75 cents and $1 per gallon from the $3 level by November if the 2006 hurricane season is not as devastating as last year.
“This is a tough period, but we’ll get through it,” Gromko said “It will get better.”