Oil price hikes aid firms

Published 12:00 am Monday, May 7, 2001

It’s deja vu all over again.

Monday, May 07, 2001

It’s deja vu all over again.

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Last summer, gasoline prices spiked, throwing consumers into a tailspin. The oil companies cited tight supplies and too-cumbersome environmental rules for the problem.

This year, gasoline prices are already on the rise far in advance of the summer driving season, and the oil companies say the same roadblocks are to blame: not enough raw material and too much demand for cleaner, reformulated gasoline. Compounding the problem this year, they say, is a heating oil shortage that loomed last winter. That diverted oil supplies that would have been used to replenish the gasoline stockpile after the end of last summer’s prime drive time.

It all makes sense. The explanation rang hollow, however, when recently the Exxon Mobil Corp. reported a $5 billion profit for the first three months of this year. That’s up nearly 44 percent from last year’s first-quarter report, and higher prices it charged for oil and natural gas are what propelled the gain. Some Wall Street analysts have said the oil giant’s biggest problem might be what to do with the gusher of cash.

Unfortunately, that’s not the case for motorists. Experts believe once the peak driving season arrives, the nationwide average price for a gallon of gas could rise another 20 cents, with prices reaching $3 a gallon in parts of California and in cities such as Chicago and Milwaukee.

If, as oil companies claim, making fuels that are safer for the environment would break the bank, this much is known: It’s a big bank to break, and it’s only getting bigger.