Nevada County Picayune and Gurdon Times Newspaper Archive

Gas Prices Climb Higher Again, Now $1.60 Per Gallon

Once again motorists are seeing gas prices climb to exorbitant levels.

Most area service stations are selling 87 octane gasoline for $1.49.9, though some have raised their prices to $1.55.9. The others are expected to raise their prices soon as well.

However, according to information gathered from the Internet, the use of gasoline has dropped, with the Organization of Petroleum Exporting Countries (OPEC) raising prices of crude oil anyway.

Oil prices have been more than $30 per barrel, which is almost three times what the price was last spring.

OPEC nations are still reluctant to increase their production levels, which means the price of gasoline will continue to rise.

Reports show some areas of the Midwest have gas prices at $2 or more per gallon.

Earlier this year there was speculation OPEC would increase its production to help bring prices down. This, though, hasn't happened. In fact, there has been little, if any, change.

Iranian Oil Minister Bijan Namdar Zangeneh, said Iran still opposes any production increase.

On the other hand, Ali Rodriguez, the Venezuelan oil minister, said there will probably be an increase in production, but didn't mention when this would occur.

Pressure has been maintained throughout the year by the Clinton administration, as it has worked to get oil priced down and production up.

Joe Lockhart, White House spokesman, said prices have reached a level where they are too high. This is running the risk, he added, of reducing the demand so it could potentially be too high for consuming nations as well as the oil producing countries.

Washington's efforts, though, have met with resistence from OPEC.

Zangeneh has said there's no reason for production to be increased until prices are further evaluated. He claims any production increase will result in stockpiling by other nations which will jeopardize the price of crude oil along with market conditions in the future.

Along with OPEC nations echoing this sentiment, Norway and Mexico agree. Norway and Mexico are not members of OPEC, but their oil ministers concur with OPEC's stance.

Indonesia's Soesilo Yudhoyono, the mine and energy minister, said his nation is in "no hurry" to increase production either.

Venezuelan President Hugo Chavez said the current price of oil is "fair and just."

Global reports state crude stocks are relatively low, while oil prices are high. Motorists around the world are getting more and more upset at the continuing rise in gasoline prices.

This unrest is putting more political pressure on governments in consumer countries to take some type of action.

OPEC's refusal to let the world know its plans is nothing new. For the 40 years OPEC has existed, its actions have been confusing to experts and recent events have done nothing to change OPEC's historical behavior.

Meanwhile, refineries across the U.S. have been buying as much crude as they can to make gasoline to meet the needs of the peak summer vacation season.

According to the International Energy Agency, based in Paris, global demand for oil will ease somewhat during the second quarter because the higher prices have discouraged consumption.

Leo Drollas, chief economist for the Center for Global Energy Studies in London, said this is all OPEC's fault for not increasing production in January.

OPEC nations did increase production somewhat in March, adding about 500,000 barrels daily, but, Drollas said, it was a case of too little being done too late.

Meanwhile, the world's largest oil and gas companies are rolling in multi-billion dollar profits, reports state. These record profits are solely the result of the continually rising gas prices.

Jordan Horoschak, Standard & Poor's head of energy equity research, said this is a good time for the oil and gas industry. Because demand is strong for gasoline oil and gas companies can charge twice as much per gallon as they were this time last year.

In many cases, on the local level, bulk companies are accused of raising the prices. This, though, isn't the case, as they are forced to increase what they charge based on what they have to pay for gasoline from their suppliers.

Until something changes with OPEC, though, motorists can look forward to seeing the price of gasoline keep going up.