Relentless movement toward $4 a gallon gas continues

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Inga Tolstykh has been flirting with $4 all week. As the manager of the Sunoco gasoline station on Banksville Road, she has gone as far as she can go -- a gallon of regular unleaded is $3.999 -- but still thinks the dreaded $4 mark will hit soon.

"Maybe tomorrow," she said Thursday.

It can't come as much of a surprise. Western Pennsylvania's steady drive toward $4 gas took a huge jump this week, with the average price in the region increasing 10.5 cents to hit $3.978. That's $1.11 higher than what motorists paid this time last year for a gallon of plain-old, self-serve, regular unleaded.

The region's average price is only one penny above the national average, and Pennsylvania joins 13 other states plus the District of Columbia in already breaking the $4 mark at some stations statewide, according to AAA's Fuel Gauge.

Analysts and motorists are bracing for another record-breaking season at the station, with prices on track to exceed the record levels seen in 2008. And as prime driving season gets under way, a switch to seasonal gasoline and continued unrest abroad should be enough to keep those plastic "4's" dusted off in the months ahead.

The town of Sharon, in northwestern Pennsylvania, had already hit $4 by Thursday, averaging $4.004 per gallon.

Where is this half of the state's cheapest gas? In Warren, also in northwestern Pennsylvania, at $3.957, although you have to drive 144 miles from Pittsburgh to get there, according to AAA.

High prices don't exactly spell a windfall for gas station owners.

Typical wholesale prices for a gallon currently run about $3.40 per gallon, said Fred Rozell, director of business development and retail pricing at the Oil Price Information Service in Wall, N.J.

Once credit card fees and state and local taxes are accounted for, the station's profit on a gallon of gas can be a couple of cents.

As with Ms. Tolstykh and her tenth-of-a-cent buffer, "They're squeezed to keep the price as low as they can," Mr. Rozell said.

Increased demand around Memorial Day is expected to cause prices to rise even further, and refineries are mandated to begin transitioning to more expensive summer-blend gasoline with special additives on June 15, said Kent Moors, a political science professor at Duquesne University who specializes in the gasoline market.

"I wouldn't be surprised if we're up around $4.20 around the Fourth of July," he said. "And if anything happens anywhere -- I'm not even talking about another insurrection in the streets, but anything anywhere -- it'll go much higher."

Crude oil prices closed Thursday at $99.80, down $9.44 on fears of a retrenching U.S. economy. It has historically taken up to two weeks for gas prices to respond to crude oil fluctuations, said Mr. Moors.

Continued civil unrest in the Middle East, where major oil reserves are located, has tampered with the erratic oil market all year long.

International demand from places such as China and West Africa had already sent prices up when the first protests broke out in Tunisia in mid-January, said Mr. Moors.

"If we go back to the beginning of January -- before Tunisia -- we had the highest gas prices in the United States for that time of year in history," he said.

The international turmoil is adding up to costly trips to the airport for Valerie Stacey, a cab driver who lives on the South Side. Her cab gets about 18 miles to the gallon, which means a round-trip ride to Pittsburgh International Airport from Downtown costs her about $8 in gas.

To offset some of the expense, the company that owns her cab increased the base fare rate by a nickel last week.

Since prices have risen, Ms. Stacey has started taking clients she used to pass on, such as the calls she'll get at "some ungodly time like 5 a.m."

She's driven a cab on and off for the past 11 years while working on a Ph.D. in counseling psychology at the University of Pittsburgh. But even Ms. Stacey has trouble offering counsel on the highest gas prices she's seen in her cab career.

"The one day I spent $128 in gas," she said. "If I didn't drive for a living, I would ride my bike everywhere."

Meanwhile, Ms. Tolstykh at Sunoco hasn't seen too much of a dip in business yet, but that could be because only 25 percent of her profits come from gas sales. The rest comes from food.

In fact, the most profitable item she sells is a 20-ounce bottle of Deer Park water for $1.29 (per-gallon rate: $8.39.).


Erich Schwartzel: eschwartzel@post-gazette.com or 412-263-1455.


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