Don't blame gasoline retailers and distributors for the rising price of gasoline at the pump, says the Utah affiliate of the Western Petroleum Marketers Assoc. They're also being squeezed by the crisis in the Persian Gulf.
Glade Sowards, executive director of the Utah association, said gasoline retailers and distributors have been saying, since Iraq attacked Kuwait on Aug. 2, that they are being unfairly criticized by consumers for soaring gasoline prices.Now, says Sowards, some data gathered by the Petroleum Marketers Association of America (PMAA) confirms that claim.
Between early July and Sept. 5, said Sowards, the spot price of crude oil increased 31.9 cents per gallon. During the same period the wholesale price of gasoline jumped 29 cents per gallon while retail gasoline prices have increased only 20 cents per gallon.
"People are angry and we don't blame them," said Sowards. "But we can't increase our prices fast enough to recoup what we're being charged. Inventories and accounts receivables go up but margins are lower. I would point out that in Los Angeles last week gasoline was $1.60 a gallon."
Sowards said the PMAA figures confirm that the major oil companies have not passed through all of their increases in crude oil costs, but "it has been the retailers and distributors that have sustained the largest hit by not passing through nine cents of their increases."
For many retailers, he said, that means they have been losing money.
Oil industry newsletter The Lundberg Letter reported Monday that gasoline pump prices have risen more than 20 cents a gallon since Iraq's invasion of Kuwait to the highest average level ever.
Trilby Lundberg, director of the Lundberg Survey, said a check of gasoline prices Friday at more than 13,000 retail outlets showed the weighted average price for a gallon of gasoline - including state and federal taxes - was $1.3835 a gallon.
Lundberg said the 2.91 cent-a-gallon increase over the report two weeks ago brought average pump prices to a level exceeding the previous high of $1.3782 a gallon recorded in March 1981.
"Nominally, $1.3835 a gallon is the highest weighted average" ever recorded by the Lundberg since the service began surveying gasoline prices in the 1950s, she said.
Sowards said the future price of gasoline on the street depends on many factors that are impossible to predict, "but there are some good indications that stability is developing. However, it is always important to remember that things could change rapidly."
According to the PMAA, American refineries are producing at near capacity and crude oil stocks continue to remain high. U.S. Department of Energy data indicates that on Aug. 24, crude oil supplies stood at 381.1 million barrels, up 1.6 million over the previous week and 42.1 million over year-ago levels.
Distillate fuel stocks are also relatively high, said the PMAA, totaling 126.3 million barrels on Aug. 24, an increase of 1.4 million in one week, and 10 million higher than the same period last year.
The PMAA said current distillate supplies are more than 10 million barrels higher than a year ago. Gasoline supplies have fallen 5.6 million barrels in one week and are nearly 12 million lower than a year ago.