Post-holiday relief at pump may arrive
SUMMIT COUNTY – Ready to trade in that gas-eating SUV after filling up the tank over Labor Day weekend?After gas prices across the state reached new record-high levels – prices climbed to an average of $3.06 per gallon for regular unleaded gas over the weekend – the lingering question remains as to whether any relief is in sight.”Hurricane Katrina, I believe, was just a blip (on prices),” explained Sanjay Ramchander, an associate professor of business at Colorado State, and an expert on energy and oil futures.”I think the usual (Labor Day) factors came into play, but the majority of the spike was because of Katrina fears,” Ramchander added.
The added pressure on domestic refining and production from the storm edged prices higher as well, but the effect is likely to be short-term. That means Katrina’s effects might already be in consumers’ rearview windows.As refining and production returns to pre-Katrina levels, prices should ease off of the spiky highs seen this past weekend.Around the county, drivers were hard-pressed to find gasoline priced below 3 bucks a gallon this past weekend. Some local gas stations limited their sale of regular gasoline to stave off depleting supply, while other stations posted warnings that sudden increases in prices were out of the operators’ direct control.Traditionally, the Labor Day weekend is one of the busiest for Colorado travelers by car. Prices generally spike in the wake of that raised demand, then drop as travel demand decreases. AAA predicted that more than 34 million Americans would take to the highways over the holiday weekend, but it seems that many drivers did change their travel plans in response to higher gas prices.
Colorado Department of Transportation numbers show that 8,000 fewer cars traveled through the Eisenhower Tunnel this Labor Day weekend than the year before, the lowest total since 1996.Can anything immediately be done?President Bush most recently announced that the country would tap into the nation’s Strategic Petroleum Reserve, which should provide some temporary relief. But more importantly, that action, along with other nations tapping their reserves as well, sends a signal to the market that the crude-oil problem isn’t all that bad, Ramchander said.
On the state level, Colorado does impose a certain amount of taxes on gasoline consumption, but due to the temporary nature of this particular supply problem, activity on the state and local level is likely limited.State House Majority leader Andrew Romanoff recently addressed the issue by promising new legislation that would better focus the state’s energy efforts on renewable sources of energy, such as wind and solar technologies. But those actions aren’t expected to have much of an impact on prices in the short term.”Due to the temporary nature of this particular supply problem, I’m not sure the government can do much of anything,” Ramchander added.Duffy Hayes can be reached at (970) 668-3998, ext. 250, or at email@example.com.
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