If you thought the motivation for an at-home holiday stay-cation died out in 2010, you haven’t visited your local service station lately.
Gasoline prices, already at near record highs, are again headed upward in the South Sound as the Memorial Day holiday approaches. Those costs might be enough for some people to consider scrubbing planned road trips.
At least one analyst is predicting that 2008’s record prices — $4.34 a gallon — could be eclipsed in the next few days here.
“Over the next week, I expect we’ll see a 10-cent to 35-cent-a-gallon increase,” said Patrick DeHann, senior petroleum analyst with Gasbuddy.com. “Supplies are very tight. We’ve seen wholesale prices rising by 35 cents a gallon almost overnight,” he said.
Frank Pupo Jr., executive vice president of Tacoma-based Associated Petroleum Products, agreed that a price spike is in the cards. APP is one of the state’s larger fuel distributors.
“I think we’ll see a strong price rise followed by a free fall,” he said.
Those analyst prophecies could become self-fulfilling realities as motorist crowd stations hoping to fill up while gas prices are merely expensive but not yet shocking.
At Tacoma’s Costco near the Tacoma Mall, cars were lined up Thursday several deep to buy gas at the relative bargain price of $4.13 a gallon. That’s more than 12 cents less per gallon than the average price at Tacoma stations. That average, which had fallen for more than a week, started climbing upward again Thursday.
In the Olympia area, multiple gas price reports showed prices there were on the rise with per gallon prices ranging from $4.14 to $4.39 a gallon for unleaded regular.
Pupo said he expects overnight price increases at the retail level could escalate as much as 10 cents a gallon, particularly at independent gasoline retailers. Those retailers buy fuel on the spot market. That market has seen steep increases over the past few days. Branded gas stations, contrary to the usual pattern, might post lower prices than the independents, such as Safeway or Costco, he said, as the big oil companies allocate the less expensive supplies to their own stations.
Tom Kloza, chief analyst with the Oil Price Information Service, noted the same phenomenon.
“Spot (and to a great extent wholesale) gasoline is priced at nearly ($3.75 per gallon) in the Seattle and Portland areas. It is worth more than ($1 per gallon) more in those markets than it is worth in say the U.S. Gulf Coast, and for that matter in most of the U.S.,” he said.
But haven’t crude oil prices dropped steeply and retail gasoline prices declined sharply in the rest of the country outside the West Coast?
Yes, crude prices are down by as much as $30 a barrel, and retail pump prices are far lower nationwide, more than 57 cents a gallon less than South Sound prices, according to GasBuddy.com.
In South Carolina, the state with the lowest gas prices in the country, the average price of a gallon of gas is now $3.27 a gallon. And you don’t have to travel far to see a substantial difference from West Coast prices. In Spokane on Thursday the average price was $3.95 a gallon. In Boise, the average price was $3.77.
DeHann, Pupo and Kloza say refinery shutdowns here are affecting the supply and pumping up prices.
The state’s biggest refinery, BP’s at Cherry Point, closed down Feb. 17 because of a fire. That refinery only now is returning to production.
Pupo said Tesoro’s refinery at Anacortes has experienced some production hiccups in recent days.
“Thanks to a cluster of refining issues (in the Puget Sound area and in California), inventories of gasoline on the West Coast are as low as they have been for Memorial Day weekend since 1992 or earlier,” Kloza said.
If there is any good news in the gas supply situation locally, it’s that the shortage won’t last long.
Pupo is expecting a sharp drop. DeHann expects prices will turn downward in a week to 10 days. Kloza says the price escalations are a fleeting phenomenon.
“There is a temporary spike in the Northwest, but it is not indicative of the country, or the world. I suspect that Washington state may see some record Memorial Day weekend prices, but this is not the march toward the ridiculously high prices that some false prophets were predicting this winter,” he said.
A few hours chatting around the pumps at a local gas stop Monday underscored the pain.
“Things are a little, little bit better than they were,” said Dennis Barker, a former construction worker who started a home-renovation business about a month ago with a friend. “But I’m spending more — I’m going around trying to drum up some business,” he said.
The $50 a week he spends on gasoline imposes strict efficiencies, Barker said, on everything else.
For people on fixed or reduced incomes, lingeringly high prices create a ripple that changes patterns of life in many ways, large and small.
David Moceri, who was laid off this spring from a mattress factory, now buys no more than $10 of gasoline at a time. Harvey Johnson, a self-employed handyman, used to carry his handyman tools, like his ladder, in a pickup truck from job to job. Now he stuffs it all in his Honda, the ladder jutting from the back-seat windows like an afterthought.
“Half as much gas,” he said.
The New York Times contributed to this report
John Gillie: 253-597-8663
john.gillie@thenewstribune.com
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