Gas prices up 16 cents a gallon in week
By Abe Hardesty
Posted February 5, 2013 at 4:41 p.m.
Lowell Wohlford of Anderson puts the pump back after getting regular unleaded gas for $3.25 a gallon at the Hickory Point station on East Greenville Street in Anderson.
Gasoline prices rose 16 cents a gallon in the Upstate during the past week, leaving entrepreneurs like Lane Hix wondering just how much higher they will climb.
And as he pondered the sale of his mobile home transport truck, the Anderson businessman wondered how many small businesses will be crushed by the soaring prices.
"When you have to buy a lot of gasoline and diesel, it really hurts you," said Hix. He owned Hix Mobile Home Transport from 1999 until May 2012, when the combination of declining mobile home sales and rising fuel costs forced him to park his rig.
When Hix began his transport business in 1999, gasoline was $1.30 a gallon, and diesel was $1.56. Hix could fill his two 75-gallon tanks for about $200. The manufactured-home business was healthy at the time, and Hix was delivering enough homes to make his truck payment and some profit as an owner/operator in a one-man production.
But when gasoline and diesel prices hit all-time highs for early February in 2012, that same 150 gallons of gasoline cost nearly $600 each time Hix had to refill. And when manufactured home sales began to slump, it was difficult to pass that cost on to the dealers.
Hix parked his truck and hoped for better days. He's still hoping, although he now thinks it might be time to sell the truck.
"When the prices go up, you try to hang on for a while, and take money out of your pocket to keep it going," he said. "But after a while, you just have to give it up. I had to get out of it."
He fears that many other small companies in the transport business will meet the same fate.
"I know a lot of owner-operators who take a rig out west every week for about $1,200," he said. "When they could buy 500 gallons of gas for $750, they were looking at $400 profit for a week of work. But when diesel is $4 a gallon, that fuel costs $2,000, and you're losing money if you make that trip for $1,200.
"Obviously, you have to charge more. But even if you double your price, you're not making much money when fuel prices are jumping so fast. And the buyer has to add to price to his product. That's why you've seen watermelons go from $3 to $6 apiece in just a couple of years."
It has become common in recent years for fuel prices to begin climbing in February and continue into the summer. But typically, the prices do not rise this early. Or this fast. Or this high.
On Tuesday, the national average for a gallon of unleaded gasoline was $3.52, 20 cents higher than seven days ago. For the time of year, it is a record, and a record has been noted in each of the last five days.
Statewide, the average stood at $3.30 — 13 cents higher than a week ago. Locally, the jump went from an average of $3.12 for a gallon of unleaded to $3.25.
In Anderson County, only a few stations reported prices under that average. Two Easley stations, Hot Spot and QuikTrip, were selling regular at $3.18 Tuesday. The Assie Mart in Liberty and the BP in Pickens offered regular at $3.19. In Anderson, the Exxon on Pearman Dairy Road had a $3.23 price. Several stations were at $3.24, including Zooms at I-85 Exit 27 — which sold regular for $3.04 just 14 days earlier.
Diesel remains significantly higher. A Spinx station on Murray Avenue and another on Whitener Street offered diesel at $3.59, but most stations in the area were above $3.67.
Analysts explain that prices are lower in the winter because of lower demand and the use of winter-blend gasoline, which is in good supply. Price rise through the spring as demand typically increases. As gasoline prices increased 15 days in a row, the analysts say, the supply problem has been heightened by last week's decision by the Hess Corp. to close its East Coast refinery in New Jersey.
That refinery, which provides 70,000 barrels of gasoline daily, will close at the end of February because it cannot comply with new environmental standards dictated by the federal government. As a result of that closing, East Coast speculators are forced to bid more for gasoline.
The most expensive gasoline in the continental U.S. is found in California ($3.91 for regular) and the northeast, where high state taxes have pushed the average price to $3.87 in New York, $3.85 in Connecticut, $3.72 in Vermont, and $3.71 in Maine.
In the past month, 11 states have seen an increase of at least 30 cents a gallon. Motorists in Indiana, Michigan and Minnesota are paying 44 to 47 cents more than one month ago.
The five states with the least expensive gasoline averages were Wyoming ($2.94), Montana ($3.04), Utah ($3.13), New Mexico ($3.16) and Colorado ($3.17).
This is the seventh consecutive week for increases nationally and in the Upstate. The surge comes after record highs in gasoline prices in 2012, when the national average reached $3.70 a gallon in midsummer.