Oil Prices Drop, Gas Prices Rise
By Brendan Moore
The price of a barrel of oil has dropped below $100 USD for the first time in five months, but the price of gasoline in the U.S. is going up as a result of refinery shutdowns in Texas and Louisiana because of Hurricane Ike.
The average nationwide price of a gallon of unleaded gasoline has risen for four consecutive days and gone up 6 cents alone in the past 24 hours to $3.73 over fears of reduced refinery output. On a regional basis, however, the Southeast region of the U.S. has seen some huge jumps in specific areas, with some gasoline stations in Florida, for example, showing prices over $5 a gallon. Prices in other parts of the Southeast, like Tennessee, are already as high as $4.55 a gallon for unleaded regular. Increases in other regions of the U.S. have been minuscule so far.
A national survey of retail gasoline prices released by the AAA, a motorist association, Saturday morning shows that the average price of regular unleaded gasoline rose 5.8 cents to $3.73 a gallon, from $3.675 a day earlier.
The almost 6-cent increase was the largest one-day jump this year and the largest since immediately after Hurricane Katrina hit the Gulf Coast in 2005, says AAA. The price of gas rose by 14 cents and 16 cents respectively on consecutive days in the days immediately after Katrina devastated the area around New Orleans, which also had a great deal of oil refinery and pipeline infrastructure.
President Bush, reacting to the possibility that there will shortages of gasoline, and therefore price increases, released a short statement saying that the Department of Energy and other federal agencies would do their best to ensure that there are adequate supplies of gasoline for the public. In that same vein, Bush said the Environmental Protection Agency waivers on certain reformulated gasolines were suspended Friday night to make it easier for imports to get into U.S. markets.
It is unclear how effective the Federal efforts to stabilize gasoline prices will be; some energy analysts are predicting a sharp temporary increase that will last a month at the most. It is also unclear at this point how much of the price jump is due to consumer panic and/or localized price gouging. Governors in several Southeastern states have issued statements this morning saying that any firm found to be engaged in price gouging will be prosecuted to the full extent of the law.
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