Still-rising gas, oil prices affecting consumer habits

Passing cars are reflected in a gas station marquee on Broadway in Bangor.
Passing cars are reflected in a gas station marquee on Broadway in Bangor.
Posted April 08, 2011, at 8:01 p.m.

BANGOR, Maine — With oil and gasoline prices rising almost as quickly as gas station and fuel provider employees can change their signs or published prices, consumers have already started curtailing travel plans and finding cheaper alternatives.

Recent price jumps have customers and dealers alike shaking their heads in frustration. At the pumps, unleaded gasoline has vaulted 12 cents in average price per gallon over the last week nationally and 14 cents here in Maine. Aroostook County is flirting with the $4 per gallon mark, as some stations were charging $3.93 Friday.

“This year, less people are going to be traveling abroad. They won’t be going as far, and they won’t be gone as long,” said Pat Moody, AAA Northern New England’s director of public affairs. “They also say they’re taking more road trips than flights and spending less or the same on those trips by using discount services savings or spending less in other areas like souvenirs, food or lodging.”

That information was gleaned from the second annual AAA Spring Break Poll of more than 250 northern New England members Feb. 14-22.

“According to our members, 25 percent said they’d be taking shorter-duration trips over this spring break period as opposed to 17 percent last year,” said Moody.

Specifically, 27 percent said their trips would last three days or less, 39 percent said four to seven days, 25 percent said eight to 14 days, and 9 percent said more than 14.

The news is no better on the home front as the cash price of No. 2 heating oil locally Friday ranged from $3.69 to $3.84 per gallon.

“It shot up today, at one point increasing 7 cents a gallon because somewhere in the Middle East there’s supposedly a problem with a refinery,” said Charles Birdsall, president of No Frills Oil Co. in Hancock. “I would expect at least a 10-cent increase overnight based on this refinery problem and the fighting in Libya.”

No Frills’ cash price for 100 gallons or more of No. 2 oil was $3.849 per gallon.

“It’s just nuts. There’s nothing of substance there. It’s all hype as far as influencing prices,” added Birdsall, who said his company was the first to offer a prepay option about 15 years ago. “They should not be allowed to speculate the way they are right now, because it’s a commodity that affects every American directly or indirectly and there’s no accountability with all of these projections and speculation.”

While it’s too early for Maine oil dealers to project the cost of pre-buy and budget plans for customers this fall and winter, dealers such as No Frills and A.E. Robinson Co. of Dover-Foxcroft, Dexter and Greenville are in the process of evaluating trends, current prices and industry recommendations and will continue to do so through May, as most budget plans first come out in June.

“I don’t know of anyone who’s come out with their plans for the fall and winter yet,” said Jim Robinson, president of A.E. Robinson. “I can tell you I think people ought to get onto a payment plan as soon as possible and spread it out over a 12-month period while getting the price capped. In the 17 years we’ve been doing this, the budget deal was the better deal 14 out of the 17 years.”

A.E. Robinson’s cash price for No. 2 oil Friday was $3.699 per gallon.

“They seem to be going up a little bit every day, sometimes twice in a day,” Robinson said of prices. “But actually sales are up and that’s surprising to me, based on the price. If it’s supply and demand determining price, the price wouldn’t be where it currently is. Speculation is driving it. You can look into a crystal ball right now and see right through it.”

There’s another factor currently affecting fuel prices nationwide in addition to the turmoil in Libya, the Middle East, and Japan.

“Our refineries have been transitioning from winter blend to summer blend over the last month, and that increases prices,” Moody said.

According to AAA, the current average price per gallon for regular unleaded gas is $3.74 nationally, $3.75 in Maine, and $3.77 in the Bangor metro area.

Nationally, Hawaii is highest at $4.39 while Wyoming is lowest at $3.47. Alaska is $4.11.

Those prices put travel costs at a premium.

“Our research shows the average U.S. motorist burns 50 gallons of gas a month,” Moody said.

Based on that, and current costs of gas compared with its cost a year ago, motorists are spending roughly 80 more cents per gallon — a total of $40 more per month — than they were last year.

But there is good news.

“Last year, we hit our peak shortly before Memorial Day, which is the traditional peak time of the year,” Moody said. “This year, the Oil Price Information Service analysts are expecting the peak to be mid to late April.”

That’s music to the ears of Carolann Ouellette, director of the Maine Office of Tourism.

“I know historically gas prices haven’t had a negative impact on travel nationally, but prices haven’t been this high in quite some time,” said Ouellette. “I think at this point, it’s too early to guess. Last year, we actually saw an increase in traffic despite high gas prices.”

Many oil dealers believe — or perhaps more accurately hope — the same trend will follow in their industry.

“Anyone who tells you they know what oil’s gonna do is a liar,” said Birdsall. “But my gut feeling is it’s going down. I just don’t see how the price of fuel can stay this high that much longer.”

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