Gas prices likely to increase

Published 12:00 am Sunday, March 21, 2004

With the summer months fast approaching, increases in gas costs might put a damper on plans for summer fun. Experts predict gas prices might reach as much as $2 a gallon over the summer and in some state’s it’s already reached those levels.

“I’ve been in business 26 years with BP and Gulf,” Gene Hisel, owner of several Selma BPs, said. “This is the highest I have seen it.”

Nationally, the average price of a gallon of gas is $1.77. Statewide the average is running at $1.631.

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Selma is above the state average but below the national average.

While official numbers aren’t available, Hisel’s BPs are selling gas for $1.75 (regular) a gallon. Chevron is running at $1.73. Many area stores are selling gas for $1.69.

For the last three months, gas prices everywhere have climbed.

The Associated Press reports some places in California selling gas at $2 a gallon.

Distributors and gas station owners in Selma won’t be suprised if prices get that high here later in the summer.

“The trend is upward,” Hisel said. “It’s been a continual rise.”

According to Alan Jones, of Jones Oil, a gas distributor in Selma, oil prices are anything but stable, sometimes changing as much as a nickel a day.

“We’re at the mercy of the major oil companies,” he said. “And they’re at the mercy of whatever crude’s selling for.”

Crude oil futures settled at $38 a barrell on March 19, a 14-year high. Industry anaylisists cite tighter supplies from OPEC and higher demand by American drivers.

Jones agrees. “It’s a world economy, so every little thing effects gas prices,” he said.

Experts say the war on terror, coupled with political and social unrest in OPEC countries could easily keep the upswing in prices going.

“In general, there’s enough nervousness, politically, and terror to keep this thing well supported,” said Scott Meyers, an analyst who trades with Pioneer Futures Inc. in New York. “We’ll have to see how the weekend plays out.”

The “upward trend” could have severe consequences for the Selma area.

Directly, gas distributors must cut their profit margin to offset the increase.

“Anytime the price goes to $1.70 it cuts into your cash flow,” Jones said. “The higher it goes the less money I make.”

The people running the pumps are hurting as well.

“It means less profit, because you pump less gallonage,” Hisel said. “People are very aware (of gas prices) and they’re cutting back as a result.”

Although Hisel said his gas and convience store business has decreased, he’s noticed an increase in his automobile service business.

“People are trying to get maximum mileage (from their cars),” Hisel said.

Gas retailers aren’t the only ones hurting, it’s also affecting the city and county governments.

“It really is a problem,” said Selma Mayor James Perkins. “That cost is escalating, it’s causing some problems with the budget.”

Cynthia Mitchell, of the city’s financial office, said despite the increase in cost the city is still well within its budget limits.

According to Mitchell, the city budgeted $180,000 this year for gas costs, used for the city’s fleet of garbage trucks, police cars, lawn mowers and other vehicles.

So far, about 39 percent of that &045;$72,000 &045; has been spent on gas.

Which, Mitchell said, is where the city approximately was last year.

Still, and increase to $2 a gallon, can’t help the county, which bids its gas out monthly.

“It’s certainly increased our costs,” Probate Judge and County Commission Chairman Johnny Jones said. “This is the highest it’s been.”

Executive director of the Selma-Dallas County Chamber of Commerce Claire Twardy said it could effect the local economy. “It could definately have an impact on our tourist dollars, with Pilgrimage and the Battle of Selma coming up,” Twardy said.

The situation has gotten severe enough, that lawmakers are proposing changes in gas regulations in an attempt to offset it.

Rep. Demetrius C. Newton, Speaker Pro Tempore of the Alabama House, has introduced a bill to repeal the Alabama Motor Fuels Marketing Act.

The act sets a minimum for gas prices statewide. The repeal proposed by Rep. Newton would allow distributors and retailers the opportunity to set prices as they wish.

“Our citizens have been forced to pay higher prices for gasoline for the past 20 years and the time is right to put an end to this outdated law,” Newton said in a press release.

Sen. Hank Sanders said he would support the repeal of the Alabama Motor Fuels Marketing Act. “If this bill will help lower (prices), I want to help lower it,” Sanders said. “If it doesn’t I’ll be looking for a bill that will.”

Still, it’s not certain what the bill could do to lower the price of gas if at all. Current taxes on every gallon of gas in the Selma area is 42.4 cents a gallon &045; 14 cents of which is a state tax.

So far, nobody is quite sure they’re willing to repeal any of those taxes.

Sanders said he would, if the money needed for road, bridge and highway construction and repair &045; where the bulk of those funds go &045; would be unaffected.

“I would (vote for a tax cut) if it would not reduce the amount of service we have on the highways,” Sanders said. “That would be difficult.”

Until something happens Selma consumers will be forced to pay at the pumps or walk. It won’t be much fun for the retailers either.

“I’ve been in (this business) since 1976,” said Jones. “It used to be a fun business. Many a day I wished I’d gone into something else.”

Gas Taxes in Selma*






*per gallon of gas sold. Information provided by Jones Oil Company.