Gas prices continue to increase
Jason Cannon , BNI News Service
If area gas prices continue to rise at their current pace, local motorists could be paying well over $1.50 per gallon of unleaded fuel according to American Automobile Association for Alabama (AAA) spokesman Greg Womble.
The per gallon price of unleaded fuel has jumped almost 10-cents over the past seven days and with so many factors to be considered in setting gas prices, there could be little relief in the near future.
"I think it's probably a combination of reasons," Womble said of the increases. "Gas prices typically tend to edge upward in the first and fourth quarter of the year anyway. Even if things are nice and peaceful in the
Middle East and everything is OK at the well."
The Organization of the Petroleum Exporting Countries (OPEC) is getting a record $32-$34 per barrel of crude oil which is also contributing to the price spike.
"Some annalists say with those kind of prices we should be paying more at the pump."
OPEC has not increased the amount of oil they increase to the U.S. due to the poor performance of the dollar in the world market. All the while U.S. demand for fuel has, at best, increased.
"That, in essence, is a decline," Womble said.
Womble said the increase in demand for fuel caused by holiday travel and the onset of cold weather are the primary driving force behind the recent escalating prices.
"When the weather turns cold, a lot of the well reserves are used for heating oil," he said. "We had a very heavy travel season but we had a very mild winter so far."
However, the quick onset of cold weather last week, Womble said, helped to drive the prices so quickly by using up some of the standing reserve.
Since Alabama is just getting into the cold weather months and no one know for sure what can happen in the Middle East, Womble said there is no way of knowing when the price increase may stop or what the final top-out price may be.
"You have to put where we're headed in 2004 into context with where we've been in 2003," he said. "Alabama drivers pay the highest for gas they have ever paid for gas in 2003."
According to AAA, 2003 was a record-breaking year in terms of high gas prices two times in 2003. In March of 2003, Womble said Alabama motorists paid $1.63 per gallon of gas and $1.62 per gallon just before Labor Day.
Since the holiday travel season is over, Womble said motorists could take comfort in that there is not a major world event right now, driving prices up. However, he added that would not play a significant role in bringing prices down. The biggest factor in driving down prices could be the weather.
"If the winter can finish out on the mild side…that will help."