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Dayton Business Journal...
Gas prices set new
records, $6 possible
by DBJ Staff
Tuesday, April 26, 2011
Gas prices across the country continue to set new records, with
stations in some states starting to charge $5 per gallon. But some oil
analysts say $6 gas could happen this summer, sparking an energy crisis
that would be bad for the economy.
In an interview with CNBC this week Richard Hastings, strategist at
Global Hunter Securities in Charlotte, N.C., said a weak U.S. dollar is
contributing to rising gas prices and that damage to refineries from a
bad hurricane could force prices to more than $6 per gallon this year.
Gas stations in states such as California, Hawaii and Florida have
already started charging more than $5 per gallon in isolated cases, and
CNN.com reported that a gas station in Orlando, Fla., was charging
$5.69 per gallon of regular gas. That currently is the highest price
per gallon in the country.
Gas prices across the country average $3.86 per gallon for regular gas
right now, according to AAA Fuel Gauge Report. That is more than $1 per
gallon higher than this time last year, potentially setting up a very
expensive summer driving season.
In Dayton, the average price was $3.85 Saturday, with some stations
charging $3.89 per gallon. Diesel prices also are rising, and are now
at $4.16 per gallon in the Dayton region.
The highest national average price per gallon was $4.11 recorded July
17, 2008, according to AAA. For diesel the national average reached a
record of $4.84 per gallon that same day nearly three years ago.
In all, six states and the District of Columbia have average prices at
$4 or more this weekend, AAA reported.
Also this week, General Motors Co. (NYSE: GM) CEO Dan Akerson told CNBC
that gas prices at $4.50 per gallon would be “very detrimental” to the
auto industry in the U.S. A Toyota Motor Corp. (NYSE: TM) executive
also said that level could be harmful to the economy.
The high prices are getting the attention of politicians in Washington,
D.C., as well. This week, President Barack Obama said he is forming a
task force to seek out fraud or manipulation in oil markets that may be
contributing to higher gas prices.
“We’re going to make sure that nobody is taking advantage of American
consumers for their own short-term gain,” Obama said.
He was promoting renewable energy projects at the time of the
statement, and said he wasn’t worried about the impact those may have
on oil companies.
“The big five oil companies over the last five years, the least they’ve
made in profits is $75 billion. The most they’ve made is $125 billion.
They are doing fine,” Obama said.
The surge in oil and gas prices has meant strong returns recently for
oil company stocks such as BP plc, Chevron Corp.; and Exxon Mobil Corp.
Speedway SuperAmerica, one of the nation’s largest gas station and
convenience store chain, is based in Clark County.
Energy costs have a huge impact on businesses, both consumer and B2B.
Economists say high oil and gas prices affect more than just prices at
the pump, and can hit everything from transportation to exports and
even consumer spending. That means companies such as Best Buy Co. and
Apple Inc., which is trying to build and ship more of its new iPad 2
mobile tablets, can be impacted.
Rising fuel prices can have a serious impact on U.S. trucking companies
as well, and the Dayton region has long been a hub for trucking
companies because of its central Midwest location and the intersection
of Interstates 75 and 70.
Such large trucking companies as Con-Way Inc., Knight Transportation
Inc. and Arkansas Best Corp. have operations in the region.
The oil spike also has hurt airlines, with many carriers that fly out
of Dayton International Airport raising prices for airfares as much as
30 percent in recent months.
AMR Corp.’s American Airlines unit said Wednesday it is cutting its
flight schedule 1 percent later this year as a result of higher jet
fuel costs.
Read it with links at the Dayton Business Journal
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