Copyright 2000 Chicago Sun-Times, Inc.
Chicago
Sun-Times
March 07, 2000, TUESDAY, MIDWEST
SECTION: NEWS; Pg. 1
LENGTH: 560 words
HEADLINE:
Gasoline prices to soar;
Gas prices could go to $ 2
per gallon
BYLINE: BY H. JOSEF HEBERT
DATELINE: WASHINGTON
BODY:
Already at nearly $ 1.50 a gallon or more, gasoline prices are likely to
jump 20 cents by the end of May and soar even higher as the summer driving
season takes hold, the government said Monday.
The oil exporting
countries may boost production soon to ease the acute shortage that has seen
crude prices climb to nearly $ 32 a barrel, but the additional oil, even if
pumped immediately, would be too late to keep gasoline prices from
rising, according to a report from the Energy Department.
No matter what production decisions are made, "retail gasoline prices
are poised to surge to unprecedented levels before the spring is out," said the
report. It said U.S. gasoline stocks were alarmingly low. Despite the high
prices, motorists are giving little sign that they are changing travel plans or
rethinking their zeal for gas-guzzling cars and sport utility vehicles.
"We don't think it's going to cause people to stop taking long-distance
driving vacations," said Geoff Sundstrom, spokesman for AAA.
"The
economy is strong and people have the money to go on vacation," he said.
But that may change if gasoline hits $ 2 or if supplies become tight,
leading to lines at gas stations, he said.
In Albany, N.Y., Steven Hank,
a computer specialist who commutes 70 miles a day, said he's worried gasoline
might hit $ 2. Already he's spending $ 250 a month on gasoline, he said, and "I
don't want to pay that much."
But Devin Dangles, who drove from New
Jersey to Washington, D.C., on Monday, said "people should just quit
complaining" about the higher cost of travel. "You don't have a choice, anyway,"
he said.
The Energy Department said that average gasoline prices,
currently about $ 1.46 a gallon, would increase as much as 20 cents by the
beginning of summer and go to $ 1.80 a gallon during the peak summer driving
periods.
The analysis cautioned that those are national averages and
that prices could spike much higher in some parts of the country, including
California, which historically has had higher prices, making $ 2-a-gallon
regular gasoline a probability in some areas.
Oil prices, meanwhile,
moved Monday to another nine-year high.
Benchmark West Texas
Intermediate crude for April delivery settled at $ 32.18. That was the highest
closing price on the New York Mercantile Exchange since Nov. 29, 1990, when
thousands of U.S. troops were in the Middle East, preparing for the Gulf War.
Members of the Organization of Petroleum Exporting Countries will meet
March 27 to decide whether to pump more oil. Saudi Arabia, Venezuela and Mexico
already have said they will recommend some production increases and another
major producer, Kuwait, has signaled a willingness to go along.
The
government analysis examined several scenarios of increased production, but none
of those scenarios would have an impact on gasoline prices through the summer,
when demand historically is high.
There is no certainty all the
countries even will agree to boost production. Iran and Iraq, which together
account for 8 percent of the world's oil production, have argued against
increases.
The Energy Department analysis assumes Iraq will continue to
supply about 2.3 million barrels a day, and more later in the year. But Iraq has
threatened to slow its production as a way to get the United Nations to ease its
economic sanctions.
GRAPHIC: ASSOCIATED PRESS
LOAD-DATE: March 08, 2000 
