Gas could hit $3.50 in Missouri by May

Gas prices crept up on and passed $3 a gallon at many area stations in the past two weeks, but the climb isn't over.

With crude oil trading for more than $100 a barrel and the traditional time of year for higher prices coming up, experts are saying the cost of a gallon of regular gasoline could reach an average of $3.75 to $4 nationwide. And while one longtime observer of fuel prices said he doubts the higher figure, he also said motorists in Missouri should brace themselves for $3.50 per gallon by May.

"We are rapidly approaching the time of year when we gasoline prices ramp up," said Mike Right, spokesman for AAA of Missouri. "The highest prices paid in the 12-month period has been in May."

Last year at this time, Right said, the average Missouri price for a gallon of gas was $2.24. The record high average price was recorded May 24, when it cost $3.21 a gallon to fill up. On Wednesday, the average price for a gallon of regular unleaded gas in Missouri was $2.98, Right said.

Motorists filling their tanks Wednesday at Basic Fuel in Cape Girardeau said high prices are eating into their other spending. Basic Fuel was one of the least expensive area stations according to www.missourigasprices.com.

"We drive a lot less, trying to get everybody's trips in at once," nursing student Angela Holifield said. She lives near Morley, Mo., and drives to Cape Girardeau for classes.

For example, she said, it is now rare for her family to eat at a restaurant unless they are already out on other errands. Putting just over 7 gallons in her 2004 Ford Escape costs about $23. She's not ready to give up the sport utility vehicle, Holifield said. "I like my truck."

But she is thinking about other ways to save money. "I am probably going to have to find a job closer to home," she said.

And pleasure trips don't fit in the budget. "Visiting or traveling will be out of the question," she said.

Those lifestyle changes fit the responses to just-completed AAA survey of its Missouri members, Right said.

Nearly 60 percent of those surveyed said they are changing their habits because of higher fuel prices. If prices rose above $4 a gallon, he said, the survey indicated that an additional 26 percent of the members would cut back their gas use.

Already, he said, 27 percent of the members surveyed have traded their vehicles for higher-mileage models. More than one-third said they have cut back on or eliminated leisure trips.

The rising price of fuel isn't just ringing up big numbers on the gas pumps. Trucking companies are paying record high prices for diesel fuel, and every six-cent increase adds about a cent per mile to operating costs, said Ron Gjerstad, president of Buchheit Trucking Co. in Scott City.

Buchheit runs about 100 trucks at any given time, a mixture of company-owned trucks and independent owner-operators working under contract, Gjerstad said. The high price of fuel is combining with a slowing economy to cut into profits, he said.

Diesel prices in Missouri are, on average, $1 a gallon higher than this time last year. While some of the extra cost is passed on to shippers -- and eventually consumers -- through fuel surcharges, some of Buchheit's customers are asking for flat rates.

"A lot of people are requesting an all-in rate now," he said. "That means rates are substantially higher."

Even under those contracts, Gjerstad said, the rates are tied to fuel, expiring as diesel prices reach target amounts.

"We are all going to see it because we want the goods on the shelves when we purchase something," he said.

There are three main components to the price of a gallon of gasoline, said Ron Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association. The first factor is the cost of crude oil, which is up about $40 a barrel from this time a year ago, he said. The second is the cost of refining, and the final factor is state and federal taxes, which total 35.4 cents a gallon for gasoline and 41.4 cents a gallon for diesel fuel.

"The people who hate high pump prices the most are the local convenience stores," Leone said. "It hurts in-store sales and increases drive-offs."

As gas prices peaked in May, Cape Girardeau police recorded 50 fuel thefts from convenience stores. In November, with prices lower, the number of fuel theft reports fell to 24.

To combat the thefts, store owners are moving increasingly toward prepay requirements and extra security cameras, Leone said. Prepay pumps eliminate drive-offs, he said, but owners don't like them because it takes the convenience out of the convenience store.

And higher prices lead more people to pay at the pump with credit cards, which increases the fees extracted from the sale by the card issuers and hurts in-store sales, Leone said.

Missouri's current average price is about 15 cents below the national average, largely because of lower fuel taxes. That cushion isn't likely to change, Right said. But the record set last May will fall, he added.

rkeller@semissourian.com

335-6611, extension 126

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Fuel costs by the numbers

Missouri motor fuel sales, 2007

4.2 billion gallons, up 1.5 percent

Average prices

Gas, national: $3.13

Gas, Missouri: $2.98

Diesel, national: $3.60

Diesel, Missouri: $3.46

Actual prices

Cheapest in Cape Girardeau: $2.97 at Basic Fuel, 2561 Bloomfield Road; $2.99/gallon, six locations.

Cheapest in Jackson: $2.89 at Kidds, BP, Basic Fuel, Murphy USA and Jaspers, all on East Jackson Boulevard.

Cheapest in Missouri: $2.84 in Moberly, Mo.

Most expensive in Missouri: $3.25 at Stanfield's Bulldog Shack, Sikeston, Mo.

SOURCES: AAA of Missouri, www.missourigasprices.com, Missouri Department of Revenue