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Originally published June 10, 2012 at 6:07 PM | Page modified June 12, 2012 at 7:02 AM

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High gas prices hurt local economy

For more than a week, Washington has had the most expensive gas in the contiguous 48 states.

Seattle Times staff reporter

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At a South Lake Union Shell station with regular unleaded going for $4.45 a gallon, Fern Romeo stopped to fill her tank with just enough of the nation's most expensive gas to visit her friend in West Seattle.

"I've just been filling up little by little because I keep thinking I'll find cheaper gas somewhere else — but then I never do!" Romeo said.

For more than a week, Washington has had the most expensive gas in the contiguous 48 states, with state prices averaging $4.21 a gallon and Seattle metro area averaging $4.27 as of Friday morning, according to the AAA.

Prices have been unusually high in the state for the past four months but peaked to near-record levels at the end of May — all while the average national gas price dropped 20 cents in the past month.

Gas prices are gradually going down, though. Now that the Cherry Point refinery in Blaine, Whatcom County, is back from being shut down for more than three months, many think there's reason to believe the trend will continue.

"There's good news in all of this," said Tim Hamilton, executive director of the Automotive United Trades Organization, a nonprofit that represents gas-station owners. "We're primed for a huge rollback, provided oil companies pass forward prices to dealers. But they will be reluctant to do so."

Meanwhile, Sen. Maria Cantwell is calling for an investigation into whether oil companies illegally manipulated the market to increase prices and profits.

She asked the Federal Trade Commission last week to see if multiple refineries reduced operations to purposely drive down fuel inventories to their lowest levels since 1992.

In addition to the immediate sticker shock individual drivers experience, high gas prices have created other problems for the local economy: More money is going to out-of-state companies, gas-tax revenues that fund the state's transportation projects are further declining, and some businesses are dealing with tighter budgets.

Most of the money spent on gas goes to out-of-state oil and credit companies while gas-station owners are averaging a profit of 17 cents a gallon right now, Hamilton said.

A little bit more money stays in state in the form of a 0.375-cents-per-gallon fuel tax that funds maintenance of highways, bridges, ferries and other transportation projects. Revenue has been dwindling so much as people drive less and buy more fuel-efficient vehicles that Republican gubernatorial candidate Rob McKenna already has said he thinks voters need to pass another tax package to support the state's transportation needs.

Tourists are flooding into Seattle this time of year just as before, though, and not even rental-car companies are feeling a hit.

"We've seen no decrease in rentals, just more requests for more fuel-efficient vehicles," said Christy Conrad, Enterprise Rent-A-Car spokeswoman, about the Seattle market. "People are declining free upgrades just to have more fuel economy."

Some tourists laugh at those who say our gas prices are high.

"We would kiss our chancellor's backside to pay $4.45 a gallon for gas," said Stefan Sebastian, 39, who is taking a break from Frankfurt, Germany, to tour Seattle in a Dodge Journey rental car. Earlier this spring, gas prices in Germany reached the equivalent of $8.56 a gallon.

But not even high tourist season can improve taxi drivers' profit margins when gas prices are so high. Many of them, such as Orange Cab driver Abdi Saleman, have had to steadily increase hours to as much as 12 a day, six days a week to make enough money.

"I'm driving a Crown Victoria, so it's bad gas mileage," Saleman said — 15 miles to the gallon to be exact.

Higher gas prices haven't hit King County Metro Transit too badly, though, because higher ridership, more fuel-efficient hybrid buses and federal grants have helped offset the budget impact, spokeswoman Rochelle Ogershok said.

Ridership has steadily increased over the past year, especially on many of its new hybrid buses that are about 30 percent more fuel efficient than average buses, and van-pool numbers are at record highs.

Alexa Vaughn: 206-464-2515 or avaughn@seattletimes.com

Material from The Associated Press was used in this report.

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