Gas prices significantly higher than they were a year ago

Drivers are feeling the pain at the pump, as prices rose about 20 cents a gallon in the past week.

"Seventy-five dollars doesn't fill up the tank anymore," said Missy Buckner of Scott City as she shoved a gas nozzle into the tank of her Suburban at Kidds on Kingshighway in Cape Girardeau. With four children taking part in many after-school activities, she said, she fills up her tank at least once a week.

Prices in Cape Girardeau ranged Sunday from $3.15 to $3.22 for a gallon of regular unleaded gasoline.

That's significantly higher than one year ago, when the average gas price in Missouri was $2.52, according to GasBuddy.com.

Prices are expected to continue to climb as the price of wholesale gasoline continues to go up, said Mike Right, vice president of public affairs with the AAA in St. Louis. On Friday, wholesale gasoline increased 2.5 cents to $2.74 a gallon for regular unleaded.

"If this trend continues, the prices we're paying now won't last," Right said.

The spike in gas prices is due to fear and speculation more than the actual gasoline supply, he said.

Keith Boeller, president of Pajco Inc., which operates 30 Rhodes 101 convenience stores across Southeast Missouri said supplies are stable. He hasn't seen any supply restrictions but said refiners and oil companies are passing along higher costs, so in turn his company has to pass those costs on to consumers.

"We're extremely sensitive to what it does to our customers," Boeller said. "The last gas price spike had an effect on the economy as a whole. It's a difficult situation to be in."

Recent violence in Libya is a contributing factor to the price surge. Libya produces about 2 percent of the world's supplies.

"That may not seem like much, but even a slight reduction in oil supply will lead to a tight market and higher prices," said Dr. Bruce Domazlicky, director of the Center for Economic and Business Research at Southeast Missouri State University. "Saudi Arabia has said that it will make up any shortfall in Libyan supplies, but how easily and for how long it can do that is unknown."

Buckner knows that political unrest in the Middle East is why she is having to pay more at the pump here.

"Drill, baby, drill," she said. "We're killing ourselves. Government regulations make us rely on other countries when we should be relying on our own resources."

Higher gas prices mean her family will cut back on nonessential spending, Buckner said.

Last year in Missouri, the average was $2.59 statewide, according to AAA. Missouri's highest average gas price occurred in July 2008 at $3.95.

"If we're going to be paying $1 more for gasoline in 2011 than we did to 2010, it's a hit of about $1,200. I don't know many families that have $1,200 just sitting around doing nothing," Right said. "They will cut back on things like travel and entertainment to purchase fuel to take care of everyday needs."

Higher gas prices and decreased consumer spending could be a drag on the nation's already slow economic recovery, Domazlicky said.

"One estimate is that every $5 increase in the price of oil per barrel could have close to two-tenths of a percentage point off world growth, which is quite significant," he said.

mmiller@semissourian.com

388-3646

Pertinent address:

103 N. Kingshighway, Cape Girardeau MO