Gas prices rise on 10-week tear (Burlington Free Press)

By Dan McLeanFree Press Staff WriterGas prices have increased for 10 straight weeks in Vermont -- making this month the most expensive April on record to fill the tank.The Cumberland Farms gas station on Pine Street in Burlington charged $2.72 for a gallon of regular unleaded Tuesday, and that was one of the best deals around. "The lowest price I saw before this was $2.75," Charles Rook of Burlington said, as he filled up his Honda Accord with 11 gallons of gas. "I'm glad to be feeding a little car that gets 30 miles per gallon." Rook is a bit puzzled why prices continue to rise, though."I thought bad news with Iran had kind of calmed down and prices had abated," he said of the volatile oil market. Last week, Iran announced 15 British sailors held for 13 days would be released after being captured at gunpoint in the Persian Gulf, according to Associated Press accounts. The global tension sent oil prices up by about $5 a barrel to more than $66. "The Iran crisis, it's now over, but it takes a while for that to trickle down to the pumps," said Matt Cota, executive director of the Vermont Fuel Dealers Association, who follows the oil market closely. Vermonters paid an average of $2.75 for a gallon of regular unleaded, a record high for April, according to the Department of Public Service's "Fuel Price Survey." The state conducts the survey on the first Monday of each month. Vermont's February price was $2.29 -- 46 cents a gallon lower than April's price.Gas prices started rising around the first of February in Vermont. This week marks the 10th consecutive week with a price increase, said Tom Williams, the Vermont manager for AAA Northern New England. Despite the rapid increase in Vermont, fuel prices here are a tad less than the U.S. average, according to the AAA Fuel Gauge Report which tracks the cost of gas daily. On Thursday, the national average for a gallon of regular unleaded was $2.81, according to AAA. California posted the highest price on Thursday, $3.28 a gallon, for regular unleaded. New Jersey, at $2.61 a gallon, had the cheapest gas in the country.Why the rise? Joe Choquette of the Montpelier-based Vermont Petroleum Association, explained the increase succinctly: "Crude oil prices are high. Demand for gas is high. Supplies are down." The trade association represents about 100 licensed gas distributors in Vermont that supply some 600 gas stations throughout the state. The increase, the U.S. Energy Information Administration said in a report released this week, is a result of higher crude oil prices, "recent and continuing international tensions," the start of the April through September driving season and a reduction in gas supply because of "unanticipated refinery problems in February and March." Summer projections show gas prices will continue to rise, but stay below $3 a gallon.The government report projects the U.S. average gas prices to peak at $2.87 for a gallon for the month of May. The summer's average price is projected to be $2.81 for a gallon of regular unleaded. Cota doesn't expect the price to drop anytime soon."As the price goes up, our appetite for gasoline hasn't abated," he said.The 'good old days' The days of $2 gas are fading into history.The last time Vermonters paid less than $2 a gallon was March 2005, with prices at $1.98 per gallon, according to the data supplied by Kelly Launder of the Public Service Department. And it wasn't all that long ago when a gallon of gas could still be had in Vermont for less than $1.For the first three months of 1999, a gallon of regular unleaded cost less than $1 in Vermont, according to state data. In March 1999, gas cost just 94 cents. The price hasn't dipped below $1 since."The good old days are gone," Launder said.Surging oil profitsOil industry profits have surged in recent years. In 2006, ExxonMobil Corp. of Irving, Texas, the largest U.S. oil firm, tallied $39.5 billion in profit.The earnings aren't always in the tens of billions, said Gantt Walton, spokesman for ExxonMobil. "That's kind of the point that we make all the time: that this is a long-term business and there are price fluctuations all the time," Walton said in a phone interview this week. In 1998 and 1999, ExxonMobil earned about $8 billion a year -- the lowest profits during the last decade -- when the price of oil averaged $17 per barrel, according to the Energy Information Administration. During ExxonMobil's leaner years, a gallon of regular unleaded sold for about $1.12 a gallon in Vermont; adjusted for inflation, that translates into roughly $1.40 a gallon today. "Price of crude oil has an impact on the price of gas," Walton said. "There is no doubt about it."ExxonMobil recognizes the hardship for drivers paying prices that are creeping towards $3 a gallon, he said. "We definitely feel the pain of the average consumer," he said.ExxonMobil, which has 40 refineries worldwide, including seven in the United States, is helping customers, he said, by investing about $20 billion a year in capital expenditures and searching for more oil. The profits are high but should be viewed in context, said Choquette, who lobbies on behalf of the petroleum industry."Those are big numbers, but it's a big company," he said. "Exxon competes not so much with other companies, but foreign nations." Choquette said the oil companies aren't controlling the prices."The price is set on the street, believe it or not," he said, noting gas stations typically earn about 10 cents a gallon. "Nobody gets up in the morning and says, 'This is what our price is.'"