Oklahomans paying record high prices for gasoline
Tuesday, June 13th 2000, 12:00 am
By: News On 6
OKLAHOMA CITY (AP) -- Oklahomans can usually count on paying less at the gasoline pump than many other Americans. Not any longer.
The statewide average for self-serve regular unleaded gasoline is $1.65 a gallon, more than 60 percent higher than the levels motorists in the state were paying a year ago.
Chuck Mai, AAA Oklahoma's managing director of public and government relations, said the statewide average has never been higher.
"We're venturing into uncharted waters with the gas prices and they continue to inch up." he said Tuesday.
Mai said the average price in Oklahoma City was $1.59 a gallon and the average price in Tulsa was about $1.56. "But we are seeing prices quite a bit higher in the outlying areas," he said.
Mickey Thompson, executive director of the Oklahoma Independent Petroleum Association, said Oklahomans could expect to pay about $1,000 more a year for gas.
"There goes your disposable income," Thompson said. "There goes the vacation to anywhere but Six Flags. A thousand dollars is significant to most Oklahomans."
Thompson believes oil producers should be getting $25 to $26 a barrel for oil so that the United States doesn't become completely dependent on foreign oil.
Mai blamed the increases on the new Environmental Protection Agency rule that requires the sale of a reformulated gasoline in many Midwest cities and Eastern states where federal air quality standards haven't been met.
Oklahoma doesn't have to use the reformulated gasoline, but Mai said motorists here are paying the higher prices because the refineries have had to devote more of their production capacity to meet the demand for the reformulated fuel.
"Supplies are pretty tight right now, which is unfortunate because demand is quite high," he said. "We're seeing the effects at the pump."
"In past years, in large part the price has been determined by foreign countries. This time around it is our own country, our own government, which has instigated a course of action which has resulted in higher prices," Mai said. He said the June 1 date forthe new gasoline couldn't have been worse. Thompson said that part of what the refiners are saying about the capacity has to be correct, but he says the rising prices still make him scratch his head.
The margin between the prices at the pump and what the producers get is closing in on 60 cents, which is almost triple the margin of two years ago, he said. He said the extra money isn't going to independent oil producers.
Thompson said that with all things being equal, without there formulated gas, the price now should translate to $1.20 to $1.25a gallon.
"This other deal is a wild card and it spooked everyone in there finery business and now it's spooking all of us," he said.
Mai said the higher prices aren't stopping people from traveling. He said auto travel is still the cheapest way to go. He said AAA is seeing that people are traveling, but not as far.
Instead of trips to Williamsburg, Va., for example, people maybe going to Colorado or the Grand Canyon.
Mai said he believes there is an end in sight to the rising prices. He expects it later this month when the refineries reach a balance in production of the various fuels.
"Oklahoma's ace in the hole is a high level of competition, "Mai said. He said that has traditionally helped keep the statewide average price low.
The state isn't even in the lowest 10 states. "Now we're in the middle of the pack," he said.
"My belief is that once the supply situation is straightened out, that competition will bring our prices down. You'll see stations compete for greater market share and this will benefit prices at the pump," he said.