State gas prices hit all-time high

Washington's gas prices yesterday hit an average all-time high of $2.319 per gallon for self-serve regular unleaded, and some drivers -- faced with tabs of $30 or more for a fill-up -- were left fuming.

"Look at that! $2.58 for unleaded!" exclaimed Josh Dallyn, 24, as he filled his 2001 PT Cruiser at the Union 76 station at Broad and Denny. "It's crazy when the gas prices get higher than milk prices."

Yesterday's statewide average price surpassed the previous high of $2.309, set May 29. But with the current wholesale price of oil running $20 a barrel above where it was at this time last year, most analysts expect high prices to persist, and even increase, as the summer driving season approaches.

Last year, Washington prices peaked May 29. The year before, it was a couple of weeks earlier.

"So this is pretty early in the year to have reached the peak," said Janet Ray, a spokeswoman for AAA Washington in Bellevue. "It's very probably going to keep increasing until -- sometime. I wish I could say when."

The national average price for regular unleaded self-serve gas was $2.228 yesterday. That price continues to climb since breaking its all-time record last month.

Within the state, average prices for regular unleaded self-serve gas yesterday ranged from $2.431, in the Bellingham area, down to $2.20, around Bremerton. The highest average in the state, for self-serve diesel, was $2.694 in the Richland-Kennewick-Pasco area.

Though AAA Washington, which tracks prices around the state, said these are historic highs, prices are nowhere near the all-time high when adjusted for inflation.

After the Arab oil embargo that began in 1980, the national average price of a gallon of unleaded regular reached a high of $1.35 per gallon in 1981.

That equals $2.89 per gallon in today's dollars, according to the Federal Reserve Bank of Minneapolis' inflation calculator.

It's hard to predict where the current rise in gas prices will end, Ray said, because it's unclear what causes them to change.

Until about three years ago, prices tended to increase during the summer, as demand increased because more people were using their cars for pleasure driving.

But in the past three years, "all of a sudden we're seeing much less precise patterns," with prices rising in the spring, falling in the summer and climbing again in the autumn, she said.

One influence on pricing is that the oil refineries must slow production in the springtime to begin blending seasonal additives into gasoline, so it burns more cleanly in the warmer weather. That can cause glitches in the supply, Ray said.

Volatility in the oil futures market may also affect pricing, she said. Concerns about rising gasoline demand sent oil prices higher yesterday in the world markets, overshadowing U.S. government data that showed increases in the nation's crude supply and refining activity.

Light, sweet crude for May delivery climbed 37 cents to $56.41 a barrel in afternoon trade on the New York Mercantile Exchange.

"Gasoline is a market-driven commodity," said AAA's Ray, "and there are so many pieces in the market that it's just not possible to come up with an easy answer."


		Grant M. Haller / P-I
	Gevin Booth pumps gas into his 1983 Volvo station wagon in West Seattle. "I'll stop at $30. I can't bear to put any more in," Booth said.

But Queen Anne resident Maura Murphy, filling her 1999 Toyota RAV4 at the Shell station at Denny and Queen Anne Avenue, took a stab at it anyway.

"You know the money is going into pockets that aren't mine and aren't yours. It's always been that way. If the extra money was targeted toward all the cuts that happened for disabled and handicapped people, I'd pay twice that much."

It isn't.

Of every dollar paid for gas in Washington, 18.4 cents goes toward federal tax and 28 cents toward state tax.

Of the remainder, roughly 43 cents goes toward buying crude oil, 13 cents goes to distribution and marketing costs and profits, and 13 cents goes to refining costs and profits, according to the U.S. Department of Energy. In addition, service stations may mark up the price.

Those figures don't add up to $1 because taxes typically account for only 31 cents of every gas dollar, but Washington's taxes are higher than that.

Though gas is expensive and the reasons for that are unclear, there's no evidence the price increases reflect some kind of market manipulation.

West Coast prices are consistently higher than those elsewhere in the continental United States. And last year, the state Attorney General's Office, which regularly monitors gasoline pricing, initiated a study to determine whether price increases indicate possible anti-competitive behavior or reflect normal market forces.

It concluded that the then-current high prices "appear to be a reflection of a tight supply/demand balance."

This report includes information from The Associated Press. P-I reporter Dan Richman can be reached at 206-448-8032 or danrichman@seattlepi.com

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