As Summer heats up, so will gas prices

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Gas station employees report that grumbling has subsided, but it hasn't stopped.

Though gas prices been on the downhill slide, they still aren't at a level consumers are comfortable with.

In Craig, the price is holding at $1.69 a gallon, 22 cents higher than the state average. Local prices are the highest of the nine cities whose gas prices are charted by AAA Colorado. Only Vail compares at $1.69 a gallon.

Until this week, AAA Colorado charted a seven-week decline in gas prices that gave drivers hope they might see prices fall to the level they were in the summer of 1998.

But entering the peak summer driving season, prices are again increasing. As of May 10, the state average per gallon for unleaded gasoline was $1.41. By May 17, that price had risen to $1.47 a gallon and officials expect the price will continue to climb.

Local residents didn't benefit much from the statewide decline the past two months as prices remained steady at $1.69 a gallon.

"It changes week to week," AAA Colorado representative Mary Greer said. "Sometimes prices go up faster that we can get the report out."

Gas prices have risen steadily since April 1999 when OPEC (Organization of Petroleum Exporting Companies) cut back on crude oil production by 4.5 million barrels a day in an effort to raise global energy prices. At that time, crude oil sold for about $10 a barrel and OPEC cut production in an effort to force that price up. The organization's goal was to see prices at $22 a barrel.

"It was a strategy that worked," Greer said. "It even exceeded their expectations."

The cutback drove prices to $34 a barrel.

Gasoline prices leveled off when OPEC agreed to increase its production by 1.7 million barrels a day, bringing the price per barrel to around $30.

Gas prices directly relate to the cost of crude oil because gasoline is a byproduct of crude oil production.

According to Greer, the production increase helped drive down the prices of gasoline. Refineries also offered discounts on their stores of winter-grade gasoline to make room for summer-grade gasoline.

John Bennitt, spokesman for Conoco, said there is a federal demand for gasoline with a low evaporation rate in the summer. The requirement is passed on to customers to the tune of five cents per gallon. Customers may see more of an increase than that if demand is high or production levels are low.

Consumers are now seeing an increase because the nation is approaching its peak driving season. As the demand for fuel increases, so does the cost.

"Prices usually peak from Memorial Day to Labor Day," Greer said. "It all just depends on how much fuel people use."

According to the Oil Price Information Service, the price increase can be attributed to crude oil futures hinting at $30 a barrel. Refineries are also having trouble keeping up with the high demand for gasoline and make the unique, clean-air blends for summer.

Officials predict prices will continue with no decrease throughout the summer. Motorists should expect to pay 30 to 40 percent more for gasoline than they did last summer.

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