Gas Prices Increase!

This news story was shared with me by my internship boss. It comes from "Crain's Cleveland Business:"

Read in this morning's Crain's: (the gas prices prediction drew my eye)
www.crainscleveland.com/apps/pbcs.dll/section?category=framelink&link=www.vindy.com%2fnews%2f2008%2fmar%2f11%2fa-jump-at-the-pump-sflb%2f&oas=www.vindy.com_news_2008_mar_11_a-jump-at-the-pump-sflb_

A Jump at the Pump
Published:Tuesday, March 11, 2008 By Don Shilling
A jump at the pump

If gas doesn’t hit $4 a gallon this year, expect it by next year, an official says. Sandy Greathouse isn’t overly concerned that local gasoline prices set a record Monday. The Poland retiree drives a Toyota Prius hybrid that gets 60 mpg around town. “It just sips gas,” she said. By switching to a car that’s powered partly by an electric motor, Greathouse, 62, has changed her driving habits — all due to $3-a-gallon gas. She’s not alone. Experts say this year will mark the first time that gas prices will change how some people go about their daily business. Sensing high prices are here to stay, drivers are beginning to look for fuel-efficient vehicles or combining trips.

“The customer has started to acknowledge that he’s paying a high price for gasoline, and it’s cutting into his budget,” said Ed Weglarz, executive vice president of the Association of Food and Petroleum Dealers. Wait until gas prices really get high. Weglarz said he expects gas prices to continue to rise, with the national average hitting $4 a gallon by spring 2009. Some have said it could happen this year. Some places already are getting close. San Francisco, for example, has an average price of $3.71.

Today, the U.S. Energy Information Administration is to release its forecast for gas prices this spring. A month ago, it predicted that the national average would peak at $3.40 in May or June, topping last spring’s record of $3.21. But Todd MacIntyre, senior agency analyst, said the new forecast would be higher than $3.40 because crude oil prices have set records since then. Bevi Powell, a AAA spokeswoman, said the big jump in gas prices last spring is a warning for this year. The average price in the Mahoning Valley soared from $2.47 last March to $3.20 last May.

“That shows you what can happen between this time of year and Memorial Day. It doesn’t bode very well for drivers,” she said. AAA reported Monday that gasoline prices set a record in the Mahoning Valley at $3.219, topping the previous record by more than a penny. If prices increase by 73 cents a gallon this spring as they did last year, the local average would reach nearly $3.95. Prices spike in the spring because more people are driving and refiners are producing a more expensive summer blend of gasoline that has fewer pollutants, Powell said. A variety of global supply and demand factors also impact the price.

Some statistics show that perhaps American drivers have accepted prices will stay high and are cutting back on driving. Gasoline consumption in the past six weeks fell about 1 percent from last year’s levels. The Wall Street Journal said that was the biggest drop in 16 years, except for the declines after Hurricane Katrina in 2005. Weglarz said fuel haulers in Ohio and Michigan are reporting a slightly larger drop. They are delivering between 1.5 percent and 2 percent less fuel to gas stations this year. As high prices linger, Americans will make bigger changes than just running two errands at a time instead of one, he said. “We’re going to see a return of people living closer to their jobs,” he said.

Steve Wellman, 42, of New Waterford already has made some concessions to high gas prices, but he doesn’t plan on giving up his long commute. He drives 65 minutes one way to his job as a stationary engineer in Pittsburgh. He spends about $10 a day on gas to fuel his Ford Focus for the 105-mile round trip.

Wellman said his family has combined trips when making errands and uses the Focus instead of the larger car and pickup truck when they can. But moving? “That’s not an option,” he said.

Wellman loves his house that he’s had for 12 years, and he figures that any job in his field would be a long way from New Waterford.

Weglarz said the other change Americans will be making is opting for fuel-efficient small cars and hybrids, which save on gas because they run some of the time on an electric motor. So many Americans have long-term leases, however, that it will take some time for the switch to occur, he said.

It may have already started, however. General Motors, Ford and Chrysler all reported drops in sales of trucks and sport-utility vehicles last month that ranged from 5 percent to 22 percent.

Doug Wilt, a salesman at Toyota of Boardman, said the dealership sells all of the 50 or 60 Priuses it receives each year. Usually, they are sold before they arrive. The dealership had three in stock last week, however, which Wilt attributed to a typical sales slowdown during the winter and a stagnant economy. The cars typically sell for about $23,500, he said. Other automakers have been adding hybrid engines to vehicles big and small. GM, for example, will have eight hybrid models this year. Greathouse said people often are jealous of her Prius’ gas mileage but say they don’t want to drive a small car. She said, however, that her car can fit five comfortably. Her friends have figured that out. She said that when she and her friends are going somewhere together, they will say, “Let’s let Sandy drive.”
shilling@vindy.com

Just so everyone knows, gas prices here in Ohio jumped to $3.459 ($3.46) a gallon. Because of being tight on money, Cassi will end up going with me on Tuesdays and Thursdays to school. My classes in the evening are only 20 minutes away (CSU has a campus closer than downtown Cleveland). Because I took her once, I'll probably end up taking her with me to these classes. Because Pa is farther than my class building, Tuesdays and Thursdays, when I've taken her to Pa's at night, I have, in essence, been taking 3 round trips from Elyria to Cleveland (yep, that's twice a week). Rob is also going to now step up to the plate. On the Monday's and Wednesday's that he has to work, he'll be getting up earlier to get her from school. Then, he'll either take her to Pa's house for me or meet me to get her. Most likely the latter. This way, if she wants to go on weekends and Pa wants her she can have weekends with him so I can focus on my dozens of pages in research and writing.

But, as I feared, the natural gas prices are also on the increase. It was a good thing we switched off our furnace. Remember, I think I said in an earlier post how natural gas increased 7% from December to March. Well, in one month, April's bill, it's suggested that the price will increase 8% more. We got our mailing about how we should "lock in" our gas rate. So, for the rest of the year, we've spent $430 total for heating, versus almost another grand. And, once the temperature starts to rise, like this week, we can cut back on the stove's use.

Want more info about our stove? The stove is made by a company, QuadraFire at http://www.quadrafire.com. I know JellyBean said she wanted one. Well, this company also makes fireplace inserts that are pellet burners. Couldn't tell you how well they work, by my assumption is that they work very well.

OK. Gotta go for now. Wanted to share this story above. I've got some dishes to put in dishwasher and get over to pick up Cassi from her play date.

Lots of love,
Cathy
8^ )