Ike affects Southeast Missouri gas prices

Friday, September 12, 2008
CHUCK WU ~ cwu@semissourian.com Long lines at Kidd's gas station on Kingshighway Thursday were prompted by a rush to gas up as prices rose.

Keith Boeller believes Thursday's rush by consumers to buy fuel at area gas stations was a bit premature.

By midmorning, a rumor had spread in Cape Girardeau that gas could rise by as much as a dollar per gallon overnight. The price of gasoline at most stores in the city increased by 25 cents by Friday morning.

While prices could rise again depending on how much Hurricane Ike damages Texas oil refineries, Boeller. president of Rhodes 101, which operates 30 gas stations throughout Southeast Missouri, advises customers not to overreact.

"We all need to step back and act responsibly," Boeller said. "The sky is not falling. This is an isolated situation, and things will eventually get back to normal."

The eye of the hurricane was forecast to strike late today or early Saturday near Galveston, Texas, a barrier island about 50 miles southeast of downtown Houston.

Because 25 percent of the nation's oil refining capability is in that area, a disruption in gasoline production or significant damage to refineries could cause an even bigger jump in the cost of gasoline at the pump. The average cost of gasoline nationwide on Friday was $3.675 a gallon, an increase from $3.671 from Thursday.

About 1.3 million barrels of oil are produced in the Gulf of Mexico each day, but most production has been halted until Ike no longer poses a threat to the region.

But Boeller said it's too early to speculate how much gasoline prices will rise.

"As long as there is not a huge disruption, we're only talking about a few days of a high price of gasoline," Boeller said.

On Thursday and Friday, Missouri Attorney General Jay Nixon's office was investigating reported cases of price gouging in Cape Girardeau, Jackson, Caruthersville and Sikeston. Press secretary John Fougere said the office is monitoring for price gauging and making sure retail prices are in line with wholesale prices. He advised anyone who suspects such practices to call the consumer protection hot line at 800-392-8222 or submit the claim online at ago.mo.gov.

Nixon's consumer division and the Energy Center at the Missouri Department of Natural Resources are monitoring the rack price, which is what wholesale price retailers pay for the fuel, and the price being charged consumers. His staff will be checking to see whether prices are unreasonably high or whether there are sudden shifts upward in price that aren't reflected in the wholesale price to the retailer.

"Sixty cents' increase in gas is not a good thing," Nixon said. "Obviously we have gone after price gouging before in the past and will continue to if the opportunities

are out there.

"I wouldn't want to make any premature statements. But we are watching, we

are alarmed by sudden increases in not only gas but also natural gas or

other fuels or other emergencies."

Stations such as the Ross Mini Mart in Advance, Mo., reported gas for $4.29 a gallon Friday afternoon.

Further north, the Jackson BP at 1831 E. Jackson Blvd. had raised its prices by 60 cents to more than $4.00 between noon and 7 p.m. Thursday. Down the street, the Wal-Mart Murphy Oil gas station did not raise prices and continued selling at $3.41. A three-car accident occurred while customers lined up for the cheaper gas at Wal-Mart.

One area retailer said supplier prices forced him to temporarily close his four locations for most of Thursday.

Basic Fuel owner Dave Lemmon purchases his gas from an independent provider, while other area stations buy from a major supplier. Although this normally allows Lemmon to provide gas at a cheaper price than other stations in the area, the flip side is that he is charged more at times, such as in the current situation.

He closed his Cape Girardeau store at 8:30 a.m., and by 9 a.m., his other locations in Jackson, Perryville, Mo., and Sikeston, Mo., had temporarily ceased their operations as well. But Lemmon secured enough gasoline from a supplier in Springfield, Mo., to keep his stores open through Saturday.

But Lemmon is unsure how much longer he can remain open after Saturday. That will depend on the severity of Ike.

"I'm not going to buy gas that is more than everyone else and then pass that onto the consumer," Lemmon said.

bblackwell@semissourian.com

335-6611, extension 137

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