Monday, May 07, 2001

Dealers told to be ready for $3 gas

California, Chicago stations contacted

USA Today and The Associated Press

        Shell and Chevron dealers in California and Chicago say they have been told by regional company representatives to get ready for the possibility of $3-a-gallon gasoline this summer.

        Bob Oyster, who owns 26 Shell and Chevron service stations in northern California, says representatives from both companies told him to “be prepared for $3 gasoline the early part of the summer.”

        More than 20 service station owners in California and the Chicago area contacted by USA Today say they also have been told that. The oil company representatives were not specific about which grade of gasoline would be $3, they say.

        Shell representatives say they do not discuss prices. Chevron spokesman Fred Gorell says the company never provides advance notice on pricing to retailers. “Whatever the marketplace does, we will follow. But we don't know where that marketplace is going to go ahead of time,” he says.

        Analyst Trilby Lundberg said U.S. gasoline prices jumped 8.58 cents over the last two weeks to reach an all-time high.

        The nation's average price of gas, including all grades and taxes, was $1.76 per gallon on Friday, up 5 percent from April 20, according to the Lundberg Survey of 8,000 service stations nationwide.

        The Midwest saw the highest price increase — 13 cents — and prices rose 8 cents for drivers in the West. Those two regions fared worst in part because of the reformulated gasoline they rely on to limit pollution, Ms. Lundberg said.

        Dennis Decota, executive director of the California Service Station and Auto Repair Association, says the state is short on reserves of reformulated gas. “If there were any glitch in production, prices will go through the roof,” he says.

        Some analysts see the case building for a Bush administration rescue. The Environmental Protection Agency has the ability to issue waivers of the reformulated gas regulation. That would help bring down prices. An EPA spokesperson said the agency has not received any waiver requests from refiners.


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