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Tuesday, Jul 23, 2024
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Energy Local fuel prices should remain stable despite attacks

Although some states have seen gasoline prices climb as high as $6 a gallon, the World Trade Center tragedy last week is not expected to have much effect on the supply or price of fuel locally.

Fred Gorell, spokesman for Chevron, said the supply of fuel was adequate, and urged consumers to stick to their normal purchase patterns.

He also read a statement from the company which rebuked retailers for raising prices after the terrorist attack.

“We are particularly incensed where any retailer is taking advantage of customers through extraordinary price increases. We strongly urge all retailers to do everything in their power to maintain normal marketplace pricing since that is in the best interest of our customers and our nation,” the statement read.

Chevron will also exercise restraint in its pricing decisions in the aftermath of the terrorist attacks, Gorell said.

There are some things Chevron has no control over, such as the supply of crude oil. However, within those constraints, the company will work to make sure that gasoline and other transportation fuels remain available, helping to keep prices in check.

Jeff Wilson, spokesman for the Western States Petroleum Association, agreed. Earlier, there had been some worry over supply problems immediately after the bombing, since the ports at Los Angeles and Long Beach had been closed.

Within 24 hours, however, the ports opened with increased security, and tankers are now able to get in and out, he said.

Charles Langley, gasoline analyst with the Utility Consumers’ Action Network, expects local prices to remain stable. The reported spikes of gasoline elsewhere were caused by consumer panic, not any real problem with supply, he said.

One gas station seemed to be acting on its own as it raised prices to $6 a gallon, according to news reports. Significantly, that gas station was in Oklahoma City, where people lived through a previous terrorist bombing and were more likely to be panicked, Langley said.

“The perception of the problem has created the problem,” he added.

As of press time, only one wholesaler has raised prices locally, and only slightly. The rest of them are holding the line, Langley said.

“We heard reports that one of the major refineries for California raised prices 20 cents, then backed down to a 10-cent increase a few hours later,” he said. “We’ve seen Exxon, Mobil and British Petroleum , which is affiliated with Arco here in California , all promise not to raise their prices.”

There’s no reason for a price increase, Langley added. The supply lines are open and the fuel is flowing freely.

Right now, refiners don’t want the price of gas to go up, he said.

“It would really be bad form for the oil industry to profit from an act of war like this,” he said. “We’ve gone to war over oil, we’ve shed blood for oil, and I think they realize it would be a public relations nightmare if they even appear to be profiting from this type of carnage and human misery.”

Californians shouldn’t worry about price increases elsewhere, Langley added. Due to geographical concerns, such as difficulty moving gasoline over the Rocky Mountains, California gets only 10 percent of its gas from the East, he said.

In the past, that geographical barrier has prevented California and the West from enjoying the lower prices the rest of the country experienced. This time, the state may be insulated from price spikes elsewhere, Langley said.

However, supply disruptions can leave California vulnerable. All it takes is a loss of 3 to 4 percent of supply for the state to experience price spikes of its own, he said.

However, this is unlikely. The only thing that would send prices upward is if a major refinery were to go off line due to actual or rumored terrorist activity, Langley said.

Dan Kramer, spokesman for the California Independent Petroleum Association, said local refiners are not worried too much about sabotage at in-state refineries. However, the recent terrorist bombing highlights the need for increased domestic production, since the alleged culprits come from the same region of the globe as our nation’s oil supply, he said.

“What if, in the future, our supply gets cut off from the Middle East?” Kramer asked. “If we don’t have our own supply, these folks, who appear to be radical fundamentalist factions from the Middle East, are going to control our economy.”

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