With spring comes rising gasoline prices
By HATTIE BERNSTEIN, Telegraph Staff
Published: Friday, Mar. 16, 2007
Audrey Randall shops around for the lowest priced gasoline. But Thursday, while filling up at a local self-serve station, the Nashua resident admitted she has resigned herself to the inevitable.
"It’s part of life, like paying taxes," Randall said of rising gasoline prices, the result, according to experts, of seasonal increases, refinery practices, weather and world events.
The general manager of a Burger King restaurant in Westford, Mass., Randall was filling up at the Gulf station at Cumberland Farms at 106 Amherst St. in Nashua, where regular gasoline was selling was $2.42, one of several area service stations that shared the distinction of offering the lowest price for self-serve regular Thursday.
She said she commutes 40 miles to and from work every day, but since Monday, after her mother was hospitalized in Salem, Mass., her daily commute had increased to 100 miles.
"I’m taking it in stride," said the motorist who drives a 2002 Grand Prix. "There’s not much you can do."
An online report by the federal Energy Information Administration revealed last week that average monthly motor gasoline prices are expected to increase by about 40 cents a gallon between February and June.
This week, the EIA reported seasonal increases in gasoline prices are higher this year than last year.
Several service station owners said customers were buying less gasoline.
"It’s been quiet, slow," said Robert Tate, owner with his brother, David, of Tate’s Garage on Lowell Road in Hudson, a full-service station.
Tate, who is charging $2.49 a gallon for full-service, regular gasoline, said his profit margin on motor fuel is slim, about 5 percent.
While motorists sometimes blame the service station owner for the increases, the reality is prices are driven by availability and demand, said Nicholas Wallner, spokesperson for AAA of Northern New England.
"Historically, gas always goes up in the spring, in the summer," Wallner said, citing federal environmental regulations that require cleaner fuels in heavily populated areas.
To comply with this rule, refineries must "retool," shutting down production for a period before gearing up to produce up to 19 different formulas or "boutique blends," Wallner said.
The AAA spokesperson said gasoline prices across the country reflect this seasonal trend. In California, for example, regular gasoline was selling at $3.12 a gallon March 14, while motorists in Hawaii were paying $2.92. In Alaska, the price was $2.42, while in New Hampshire motorists were shelling out $2.50 a gallon for regular, self-serve.
The lowest price was in Wyoming at $2.34 a gallon.
"Why is there such a difference?" Wallner asked, citing transportation costs and state and local taxes as factors affecting variations in price.
Wallner said since 2000, the price of regular self-serve gasoline has usually, but not always, increased between early February and the end of May. In 2000, for example, the price rose from $1.40 to $1.52 during that time. By contrast, last year, the price rose from $2.35 to $2.88.
"The increase will continue," Wallner said, pointing to world markets, the weather, and international military conflicts as drivers. "Add the unexpected, like a refinery shutting down, and you have the domino effect spiking the prices."
Wallner said many motorists who complain about rising gasoline prices should consider themselves part of the problem.
"AAA motorists are driving bigger cars, faster, going farther than ever before," he said.
But he was sympathetic toward people on low- or fixed-incomes, the working poor struggling to get by on minimum wage employment, the elderly and the disabled.
"Anybody else, those filling up an SUV or a big pickup who are complaining, have a choice," he said.
Joe Broyles, energy program manager for the New Hampshire Office of Energy and Planning, agreed, both with the premise that prices will continue to rise, and with the impact wrought by consumer habits.
"It boils down to supply and demand in New Hampshire, and the nation is the same," Broyles said. "The demand is up compared with last year. People are buying bigger cars and driving more."
Broyles said the wholesale price of gasoline is forcing service station owners to pass on the increase at the pump.
"It’s a razor-thin margin for many," he said.
In Nashua, according to a survey on AAA Fuel Price Finder posted on Thursday, the price of self-serve regular in Nashua and within a 10-mile radius of the city, ranged from a low of $2.42 to a high of $2.60. The average price was $2.47.