Prices at pump exceed $4 mark

Joe Napsha
| Saturday, April 30, 2011

As usual, business is dying for Ryan Kadlecik of Kennedy. But that doesn't mean gas prices skyrocketing to $4 a gallon or more are slowing it down.

Kadlecik, the owner of Memory Keepers monument sales and grave care, paid $99 to fill up the tank in his pickup on Friday before dropping off a headstone in Canonsburg.

"Business isn't stopping, so neither can I," said Kadlecik, 37. "I'm not going to complain. I'm just going to live."

As average gas prices nationally rose 2 cents to $3.91 yesterday, at least two Southwest Pennsylvania stations — a Citgo on Sheffield Street in Washington and a SunTex on Kennedy Boulevard in Aliquippa — were selling a gallon of regular for $4.09. Many more stations were just pennies away.

The current gas prices are at their highest level since July 31, 2008, when pump prices were falling from a record $4.11 a gallon on July 17 of that year.

"It's killing me," said Pat Dougherty, 57, of Murrysville as he filled his tank with gasoline priced at $3.95 a gallon at a Sunoco station on William Penn Highway. "When the bills come in at the end of the month, I'm going to have a difficult decision to make. I can't afford to pay everything at once."

Motorists are at the mercy of "a perfect storm that's already here," said energy expert Kent Moors, a professor at Duquesne University and the scholar-in-residence at Duquesne's Institute for Energy and the Environment.

Global demand for petroleum products is being fueled by economic expansion in developing countries such as China and India. "The gasoline prices are no longer being dictated by domestic demand," Moors said.

Although there was concern that the unrest in the Middle East was a contributing factor, Moors said that's not likely. Oil prices were high even before any social unrest, and Libya, which is in the midst of a civil war, contributes just about two percent of the world's oil.

At the same time, U.S. oil refineries are not able to keep up with domestic demand for gas, forcing companies to import an increasing amount of gasoline in addition to oil from foreign sources, he said.

Moors predicted that gas prices would reach $4.20 a gallon by Memorial Day. And if that's not bad enough, gasoline prices typically rise around June 15, when the government requires that various additives are blended into gasoline for summer, he said.

Oil rose yesterday, capping an unprecedented eighth straight month of gains. Crude for June delivery rose $1.07, or 1 percent, to $113.93 a barrel, the highest settlement since Sept. 22, 2008, on the New York Mercantile Exchange. Futures gained 6.8 percent in April and have advanced each month since August, the longest streak of increases since trading began in 1983. Prices climbed 1.5 percent this week and 34 percent in the past year.

Attorney General Eric Holder's office said that next week he will convene the first meeting of government investigators examining whether oil and gasoline prices are being driven higher by illegal manipulation.

"It's insane," said Kristin Stitt, 29, of Penn Hills, who has begun to condense driving trips. She was filling up at the Sunoco on Saltsburg Road in Penn Hills, which had some of the cheapest gasoline in the area yesterday, at $3.89 per gallon. "I plan my day so I don't drive more than 20 miles. If I want to go to Frick Park, I make sure I go to Trader Joe's while I'm out there. It (stinks) right now."

Moors said that while motorists complain, the only way to lower the gas prices would be to suppress demand. He said that's not likely to happen because motorists say 80 percent of their daily driving is "out of necessity."

The future for gas prices, as far as motorists are concerned, does not look good, according to Linda Rafield, senior oil analyst for Platts in New York, a company that provides global energy, metals and petrochemical information.

"We could challenge the all-time highs within the next several weeks," Rafield said.

The silver lining is that domestic demand for gasoline on a four-week rolling average has fallen 150,000 barrels a day — from 9.21 million barrels from a year ago to 9.06 million barrels today, Rafield said.

At Fred's BP, a full-service station in Greensburg, the gas price hovered at $3.99 a gallon. Owner Fred Oestreicher said he had ordered a tanker of gas on Thursday, which pushed his price to just below $4. He hopes his supply will hold through the weekend, but said he could not predict what prices will be the next time he orders gas.

Bill Murray, the 30-year owner of Murray's Exxon in Wilkinsburg, couldn't recall the price of gas being any higher before Memorial Day.

Murray, who was selling regular unleaded gas for $3.93 a gallon yesterday, was dreading ordering another load of pricey gas.

"If it goes up, I go up," he said.

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