GAS PRICES JUMP IN AREA; LOW INVENTORIES BLAMED

Gasoline prices in the Cape Girardeau area have climbed to nearly $1.25 a gallon for regular unleaded fuel at most stations, the highest price since January 1991.

Prices at the pump are about 7 cents higher than last week, with most stations charging $1.24.9 a gallon. Some stations are charging a few pennies less and at least one station is charging a penny more.

Nationwide, the average price of self-service unleaded gasoline was $1.28 a gallon last week. That is the highest since 1990, when the average price at the nation's pumps was $1.36, said Mike Right of the AAA Auto Club of Missouri.

In St. Louis, the pump price was $1.25 a gallon and in Kansas City $1.20.

The AAA Auto Club in St. Louis keeps tabs on gasoline prices throughout the state and nationally.

Right said gasoline inventories are at the lowest level nationally since the 1960s. He said low supply is the main reason for higher fuel prices.

Storage tanks at the two fuel terminals that supply the area's service stations were empty Wednesday. Those terminals are Itapco's Mississippi River facility at Cape Girardeau and Texas Eastern's pipeline terminal at Scott City.

"We have spot shortages every now and then on our system," said Eric Thode, a Texas Eastern spokesman in Houston. The company operates a 4,300-mile pipeline that carries fuel from the Texas Gulf Coast to the Northeast.

"This is just a blip on the screen. It should have no impact on price," he said.

The Scott City terminal expects to have a new supply of unleaded gasoline within 24 to 48 hours, he said.

Bob Blank of Bi-State Oil in Cape Girardeau said he was notified Wednesday that unleaded gasoline wouldn't be available at either terminal for two days.

But Blank said that shouldn't affect his two stations, which have plenty of fuel on hand in their underground storage tanks.

Blank said the major oil companies have cut back on their gasoline inventories in favor of just-in-time delivery.

Thode said major repairs to one of Texas Eastern's two main lines through Stoddard County also contributed to the shortage.

Right said increased competition drives down prices. But he said that is more likely to occur in urban areas where there are a large number of service stations and station owners.

Terry Sutton, a Southeast Missouri State University economist, said the Rhodes company is a major player in the region, with its string of stations.

"Rhodes is the price leader in Cape Girardeau," he said, adding that other stations typically follow Rhodes in setting their prices.

Blank said Cape Girardeau's gasoline suppliers haven't conspired to raise prices.

"It is just we all try to make as much as we can," he said.

"We went up to $1.24 to match our competition. Our margins are extremely slim and our costs just keep climbing and climbing.

"Every little penny helps us," Blank said.

A pump that used to cost $700 today costs $13,000 to $15,000, he said. Bi-State recently spent $57,000 to replace four pumps at its Morgan Street store.

Blank said government regulations on underground storage containers and increased insurance costs add to operating costs.

Environmental Protection Agency regulations have shut down some refineries. That has led to higher transportation costs as companies have brought in supplies of gasoline from refineries in the Caribbean, he said.

State and federal gas taxes also add to the price of fuel. The $1.25-a-gallon price of unleaded gasoline in Missouri includes 35 cents in state and federal taxes, Blank said.

It costs less to fill up the car in Missouri than in Illinois, which has higher fuel taxes.

Blank said unleaded gasoline was selling at $1.38 a gallon at an Anna, Ill., station.

Pump prices fluctuate. But motorists shouldn't expect a big drop.

"I don't think it will go back under a dollar for some time," Blank said.