Advertisement

Our coronavirus coverage is free for the first 24 hours. Find the latest information at tampabay.com/coronavirus. Please consider subscribing or donating.

  1. Archive

Gas prices unlikely to decline

The sharp fall in oil prices has wiped out most of the "war premium" whipped up by the Persian Gulf crisis, but consumers shouldn't expect much of a break at the gas pump immediately. Home heating oil probably will be even slower to fall at the retail level, analysts said Tuesday, as critics of the oil industry renewed their cries of price-gouging.

Those who follow the pricing of oil and refined petroleum products say that although rising crude prices usually bring rapid increases in consumer prices, drops in crude usually don't work their way into the retail level for a few weeks.

"Product prices tend to lag," said Philip L. Dodge, an analyst with Nomura Securities International Inc. "People who have established those high prices tend to give them up grudgingly."

Oil prices in the futures market have tumbled from a peak above $40 to less than $30 per barrel as signs of a peaceful solution to the Persian Gulf standoff have proliferated.

Light sweet crude for December delivery was pegged at $29.37 per barrel on the New York Mercantile Exchange on Tuesday.

Dodge predicted retail gasoline prices will dip a bit

in the near future, while home heating oil might even go up.

"On gasoline, normally it would come down at this time of year anyway," Dodge said. "Heating oil would be the reverse."

Since Iraq invaded Kuwait on Aug. 2, retail gasoline prices have gone up about 30.5 cents per gallon, according to an American Automobile Association survey Tuesday that showed pump prices were rising even as crude oil was falling over the past week. Home heating oil costs in the Northeast are likewise running about 30 cents to 40 cents per gallon higher than they were at the same time last year.

The latest survey for the Tampa Bay area shows gasoline selling for an average of $1.34 per gallon for regular unleaded, $1.44 per gallon for mid-grade unleaded and $1.54 per gallon for premium unleaded, according to the AAA Auto Club South.

"I can't imagine much decrease," said Thomas Blakeslee, an energy analyst with Pegasus Econometric Group Inc. in Hoboken, N.J. "It's usually a lag of about two or three weeks."

Big oil companies say they are not to blame for any price-gouging at the pump, because they can't control what gas stations charge.

"There have been quite clear indications that the price of gasoline has not gone up quite as rapidly as crude oil," said Gus Ensz, a spokesman for the American Petroleum Institute.

Critics nonetheless contend that oil companies are taking advantage of consumers.

At Buyers Up, a Ralph Nader consumers group in Washington, research director Christopher Dyson said home heating oil prices have remained virtually unchanged after oil took its big fall.

Oil profits mixed

DALLAS _ Mobil Corp. and Shell Oil Co. said Tuesday that their profits declined in the third quarter as soaring crude-oil prices forced refining and marketing costs higher but voluntary programs kept gasoline price increases in check.

Mobil's net income fell 28.9 percent, and Shell's 33.2 percent.

Texaco Inc. and Amerada Hess Corp., whose refining units contribute a smaller portion of total revenues, reported gains for the quarter, however.

Texaco's net income rose 24.9 percent over the 1989 quarter. Amerada Hess had a more than fourfold increase.

_ Times staff writer Bill Adair contributed to this report.

Up next:In the swing

YOU MIGHT ALSO LIKE

Advertisement
Advertisement