Monday, Aug. 25, 2003 | 11:41 a.m.
Gasoline prices rose in Las Vegas and nationwide last week and today, and industry experts are mixed on the chances for relief anytime soon.
The average price of a gallon of regular unleaded gas in Las Vegas hit $1.88 this morning, up 3 cents from Friday, said Sean Comey, a spokesman for the American Automobile Association. Local prices had jumped 3 cents from Thursday to Friday.
A month ago, AAA reported average gas prices in Las Vegas of $1.66. The all-time high in Las Vegas was $2.05 on March 25.
Despite the high local price, Las Vegas is faring well compared to the rest of the Nevada. The statewide average price today was $1.94 a gallon, pushed by a $2.05 per gallon price in Reno, an all-time high for that city.
Nationwide, gas prices skyrocketed across the country Friday, rising an average of 10 cents a gallon in most states, the day after a major surge on the New York futures market.
Gasoline futures rose 9.5 percent Thursday. It was the largest single-day increase not related to an expiring contract since 1984, according to Dow Jones Newswires.
John Felmy, chief economist at the American Petroleum Institute, said the increase reflects investors' worries about unrest in Nigeria, political instability in Venezuela and continuing problems in Iraq. All are major oil providers to the U.S.
Peter Krueger, director of the Nevada Petroleum Marketers & Convenience Store Association, said the primary reason for rising prices in Las Vegas has been a pipeline outage in Arizona. While that has no direct impact on the flow of gas to Nevada, gas that would have been directed to Nevada was being trucked to Phoenix, he said.
The pipeline was returned to service Sunday morning.
Making matters worse in Phoenix, as some stations ran out of fuel, motorists flocked to stations to fill their tanks more frequently, creating an artificially high demand.
The Las Vegas gas market was further pushed into turmoil early Wednesday when the California-Nevada gasoline pipeline was shut down for about 30 hours due to concerns over possible damage from California flooding.
"What it's all about is uncertainty," Krueger said. "Supply is not the problem, it's logistics -- getting that gas to the customers."
With the pipelines back in operation, Krueger said the prices should begin to ease.
"Once the uncertainly is out of the market and demand backs off a little bit, it should tail off," he said. "All the tanks in the (Las Vegas) terminal are full now and they've got to get rid of it."
Jim Johnson, owner of Jim's Texaco at 2051 E. Sahara Ave., wasn't as optimistic about prices falling anytime soon.
"They have the terminal filled up now with higher-priced gas," he said. "Prices are not going to go down until all of that is gone."
Johnson said the price of gas at his station was $1.65 two weeks ago. He was charged a 7-cent increase from suppliers Friday morning, forcing prices up to $1.95.
That increase means fewer customers in his convenience store and his garage.
"People don't want to spend money by going out and driving around," he said. "It hurts all phases of our business ... It's been a big shock because it's gone so far so fast."
Comey agreed that customers and station owners could have to wait for lower prices.
"Unfortunately, prices tend to rise rapidly and fall slowly," he said. "I don't think customers should hold their breath ... If they are driving around on a quarter of a tank hoping prices are going to come down, they should probably go ahead and fill up."
Even with the pipelines back up, international political unrest lingers. Additionally, Comey said, European oil producers are getting better profit margins overseas and responding by exporting less oil.
"Anytime you affect the market overall, it's going to have a ripple effect," he said.
The Associated Press contributed to this story.
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