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Drivers take it in the tank By Sean Wolfe Ashland Daily Tidings As the price of a gallon of regular edges toward the two dollar mark, gas station owners and distributors are becoming increasingly edgy themselves. Dan Wolff, former owner of the Exxon station on North Main - a station that had been in his family since 1926 - is calling the increases a scare tactic, and doubts that the big oil companies who set the price of gasoline are being entirely honest. "I'm out of the business now, so I can speak freely," Wolff said. "The prices have gone up from what I've seen about 40 cents in the last three weeks or so - it's just about a dime a week. They're telling us that they lost all that oil from Venezuela, but right now I think the big oil companies are just protecting themselves. How else do you think these companies keep showing record profits year after year?" Paul Newcombe adjusts gas prices Sunday at his Ashland Arco station. Gasoline prices continue to climb as the threat of war looms. Ashland Daily Tidings/SEAN WOLFE "The oil companies are going off of the fact that we might have an oil shortage. But last year and the year before, you have supply shortages. One refinery will have a fire. Or one will close for yearly maintenance - and always before the summer when gas demand goes up. They're raising the price to you of oil that's already been expensed out. They double, triple or quadruple the profit, and the dealer gets stuck trying to sell it at that price," Wolff said. According to figures from the American Automobile Association indicate that over the past month, the price per gallon on regular unleaded has soared about a dime a week, and AAA officials say that trend will continue. "You ain't seen nothing yet," quipped AAA Oregon Public Affairs Director Elliott Eki. "What oil companies are telling us is that bad weather, the terror alert, the situation in Iraq, and the situation in Venezuela - all of these affect demand with petroleum and gasoline. Also this week, the price of crude oil hit an all-time high of $35 a barrel. What we're asking is, with all these factors, are the price increases we're seeing legitimate?" Eki said. "The last report I got from the energy analysts is that if we do go to war, there's plenty of gasoline in the U.S. to last us a while, and the National Strategic Reserve has millions of barrels of crude. But until we get Venezuela back online a hundred percent, it's going to be hard to tell what's going to happen with these prices." Mike Hawkins, president of Hawk Oil concurs that the "Venezuela effect" has impacted prices to his customers substantially. Hawkins provides gasoline to a number of Ashland stations, including the Exxon station formerly owned by Wolff. "The increases started with the trouble in Venezuela, then a few weeks ago one of the major Chevron refineries in California went down unexpectedly. If you have something happen in the Bay Area, or Southern California, it affects all the prices on the West Coast. Refining is very tight. We barely get by as it is," Hawkins said. Like gas station owners throughout the state, distributors like Hawkins and owners of service stations receive price increase notifications by fax, typically in the afternoon. In recent weeks, price increase notifications were sent from oil companies like Chevron, Arco, Texaco, and Exxon - forcing station owners to update their prices daily, and in a few cases, twice a day. Paul Newcombe, owner of Ashland Arco on Interstate 5 exit 14, said his station has been hiking prices about two cents every other day. While Newcombe said he tries to keep prices as low as he can, he often doesn't have a choice, and that he feels the pain at the pump as much as his customers. "Not a lot of people understand the perspective of the gas station owner. People think if you own a gas station and the price goes up, you end up a winner. Far from it. In fact it's the opposite effect. Your margin stays the same. But when price goes up, people drive less because it costs them more to fill up. When people buy less fuel, the station loses because we rely on volume. If the trend continues the gas prices are going to hurt us, because we need traffic to come in the store," Newcombe said. The question as to whether the increases are fair is already being asked on Capitol Hill by Sen. Ron Wyden (D-Ore.) who advocated last week the release of oil from the country's strategic oil reserve to compensate for the losses in supply from Venezuela. Wyden has long maintained that in Oregon, supplies of gasoline are already tight, in part because a few companies in the Northwest control the lion's share of the supply. That makes for a climate where it is easier to "get away with anti-competitive practices." Eki said AAA was prepared to side with the government, should any government agency decide to take any action against companies attempting to profit from the welter of international crises. "The tough part is that any antitrust action is going to be difficult to prove," Eki said. Kevin Neely, a spokesman for Oregon's attorney general Hardy Myers, concurs. "We've never been successful in proving an antitrust case against a petroleum company, the reason being we live in a market economy. When you have these global trends, the market is often very responsive," Neely said. Oregon is not alone in the gas price hike. If anything, prices in-state reflect the national trend of steadily escalating prices. According to data from the Oil Price Information Service, the current average for a gallon of regular unleaded runs $1.655 nationally, a penny higher than Sunday. A month ago, it was $1.465, and a year ago, just $1.127. That's a 47 percent increase in a year. In Oregon, since March 1, 2002, the state's average price remained substantially higher than the national average until last August, when prices began dropping and national average prices rose sharply. Since then, Oregon prices have closely mirrored the national average. Today, the state's current average price hovers at $1.696, two cents higher than Sunday, up 28 cents or 19 percent from last month, and up 48 cents, or 40 percent from last year. The Medford-Ashland metro area's current price is hovering at a $1.707 average, up 33 cents from last month, and up 56 cents from last year. The Medford-Ashland metro area's record price came in September of 2000, when prices soared to an average of $1.878. Today in Ashland, prices run between $1.715 and $1.735. And if the trend of "a dime a month" continues, the record price stands to be eclipsed within a few weeks. LINKS: DAILY TIDINGS: Main | News | Sports | Business | Obituaries | Opinion | Columnists | AP News | Subscribe | Archives | Weather | Classifieds | Contact Us | Privacy REVELS: Main | Calendar | Dining | Movies | T.V. OTHER: Road Cams Copyright 2003 Ashland Daily Tidings 541.482.3456. 1661 Siskiyou Blvd., Ashland, OR 97520. Ottaway Newspapers, Inc. - Advertisers -