Tuesday, November 06, 2007

Gas prices top $3 a gallon

Maine Today
November 6, 2007

By Ann S. Kim

The average price of gasoline in Maine topped $3 a gallon over the weekend, leaving motorists frustrated but resigned to paying more at the pump.

It had been a while since Amanda Geary had filled up her Nissan Murano, and she was unaware of how much prices had climbed until she dropped by Stop and Shoppe on Monday at the intersection of Riverside Drive and Warren Avenue in Portland.

"When I pulled in, I did notice $3.15, I'll tell you that," she said. "I'm on empty, so I had to stop."

Geary, a waitress from Portland, said there wasn't much she could do besides pay up. The hefty bill for this stop totaled $53.45.

The average statewide price of regular gas was just under $3.05 a gallon Monday, according to AAA Northern New England. Mid- grade averaged $3.29 a gallon and premium was $3.38 a gallon. Diesel also was $3.38 a gallon.

Heating oil prices were also up, rising above $3 a gallon in Maine for the first time.

The average price rose 24 cents from a week ago to $3.09 a gallon, according to the state oil price survey.

It's not the first time this year that gasoline prices in Maine have reached these heights. The average price was more than $3 a gallon for parts of May, June and July, with a peak of $3.12 a gallon on May 25.

The current steep prices come at a time when motorists usually see lower prices because of the decreased demand after the busy summer travel season, said Pat Moody, a spokesman for AAA Northern New England. At this time last year, regular gas cost $2.22 a gallon.

The price of crude oil has been moving up steadily in recent weeks and gas prices are now catching up, he said.

It's unclear what will happen next. Many variables -- from autumn demand for gas to unrest in the Middle East, to other factors in the economy such as the subprime mortgage crisis -- will be in play, Moody said.

"When we're looking forward to the next couple of months, we're not sure which direction it will go," he said.

But Moody said he wouldn't be surprised to see an all-time high in the spring as motorists gear up for the summer driving season. People are expected to change their behavior when gas starts going for $3.25 a gallon, he said.

High gas prices disproportionately affect people with lower and moderate incomes, said Christopher St. John, executive director of the Maine Center For Economic Policy, a liberal think tank. He said people who want the higher-paying jobs concentrated in southern Maine and along the coast but can't afford housing there often live inland and farther north.

These Mainers "are driving more to work -- driving greater distances -- so it does become a very significant factor in low- and moderate-income household budgets," he said.

Most people will simply absorb the higher gas prices into their budgets if it's just a spike, said Catherine Reilly, Maine's state economist.

Prolonged high prices tend to get people to make changes such as carpooling or considering a more fuel-efficient vehicle for their next purchase, she said.

In the 1970s, high energy costs led to increased popularity of smaller cars and difficulty selling larger homes, she said.

At Stop and Shoppe, Bill Covel of Kennebunkport limited his gas purchase to $10, or slightly more than 3 gallons for his Dodge Neon, because of the "terrible" prices.

He said that although the situation was frustrating, he wasn't going to change his plans.

"I want to go where I usually go," he said, "regardless of the price."

Staff Writer Ann S. Kim can be contacted at 791-6383 or at:


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