Fear, refinery closure drives up gas prices

Fear is a powerful thing.

Although Iraq is a long way from Charleston, the fear of going to war with Iraqi President Saddam Hussein hits close to home for many Americans, which is one factor in the skyrocketing gasoline prices.

Illinois is the third most expensive state for gas in the continental United States with an average of $1.47 per gallon behind Wisconsin, $1.60, and California, $1.57, said Steve Nolan, spokesman for AAA Chicago Motor Club.

The national average for gas prices is $1.47 per gallon, but Nolan said the prices are particularly high in more densely populated cities such as Chicago, which is averaging $1.64 per gallon.

But as close to Charleston as Danville, prices are averaging $1.57, making driving to class a lot less attractive.

The increase, Nolan said, is attributed to two reasons. The first is the nationwide fear of the possibility of war with Iraq, a main exporter of crude oil.

Because of fear, crude oil prices are climbing and have hit its highest level since three years ago when prices rose to over $2 a gallon in the summer.

For the past several months, crude oil prices have risen to more than $30 per barrel when normally about this time, Nolan said, prices average $22 per barrel of oil.

With the continual fear of war, a sort of war surcharge has been implemented, and the country is now starting to see an affect of those increases.

“We’re finally starting to see the result of those increases,” Nolan said.

Normally about this time of year is the switch to winter weight gas, which costs less, and the demand for gas significantly decreases. However, Nolan said that has not happened this year, and he doesn’t expect it to with the possibility of war with Iraq escalating.

The counterpart for the increase in gas prices is the closing of a nearby oil refinery in Hartford, Mo.

Premcore, Inc. closed Oct. 1, and although it is not the largest oil company in the country or the only company nearby, Nolan said any oil closing can impact the prices in gas.

As far as the possibility of the prices dying down, Nolan said it is dependent mostly on whether we go to war with Iraq. If we reach a peace agreement, the prices will decline, but if not, they may continue to climb.

“It’s very difficult to say,” he said.

To find the gas prices in your area, check out http://www.gaspricewatch.com

or

Google’s search for gas price.”