Archive for Thursday, September 8, 2005

Gasoline prices dip slightly

Area residents feeling pinch at the pumps

September 8, 2005

In a speech last week, publisher Steve Forbes joined a growing list of economic experts in predicting that gasoline prices would temper and, in coming months, revert to pre-Hurricane Katrina levels.

On Tuesday, gasoline prices took a step -- albeit a tiny one -- toward bringing Forbes' forecast closer to reality.

Kim Mathewson, a spokesperson for AAA of Kansas, said the cost of a gallon of unleaded gasoline dropped by an average of 1.6 cents on Tuesday. Although the reduction may not come as overwhelmingly good news to motorists, the decrease is a sign that "fuel prices appear to have hit a ceiling," Mathewson said.

The average cost for a gallon of unleaded gasoline in Kansas is now $3.08. On Aug. 26, three days before Hurricane Katrina touched land in the Gulf Coast, the average cost per gallon was $2.59.

Pipelines in the Gulf Coast that shut down production due to the hurricane, thus giving oil producers reasoning for increasing prices, are resuming at least some production, Mathewson said.

"They are restarting gasoline production as of now," she said. "The supply situation is still extremely tight and motorists should conserve where they can. ... It's impossible to know long these high prices will last. We just don't know for sure."

Though prices appear to have leveled in the interim, Mathewson said the long-term outlook at the pumps indicates motorists shouldn't expect a return to pre-hurricane costs until at least November.

"Our demand is so much higher," the spokesperson said. "You may see it go down a little, but not a whole lot at first."

Motorists aren't alone in feeling the pocket book crunch at the pumps. Basehor-Linwood school district officials said the price increase has affected their coffers as well.

Pam Chenoweth, school district treasurer, said the immediate impact of the gasoline price increase hasn't been determined because bills for the month have not yet come in. However, "right now, we're expecting a pretty good jump," she said.

And that's nothing new for the school district. Two years ago, she said, the school district's average fuel bills were $9,000 per month; a year later, the per month costs increased to $15,000 per month.

This year, the district braced for another price boom by budgeting an additional $50,000 for fuel costs. But Chenoweth said the additional monies may not cover the rise in fuel prices.

"It's probably not going to be enough ... if (the gas price) doesn't correct itself in the future."

Commenting has been disabled for this item.