LITTLE ROCK — Arkansans awoke Friday to find that the price of regular gasoline had jumped 10 cents a gallon overnight.
At $3.20, on average, for a gallon of regular, the cost was 18 cents higher than a week ago when prices crossed the $3 threshold in the state for the first time since 2008.
Nationwide, the price for regular rose nearly 6 cents overnight Friday to $3.29, up 13 cents in a week, according to AAA.
The price bumps were the last straw for David Cobb, who had been commuting from Hot Springs to Little Rock each day because of a new job. When he realized that he was paying $100 a week for gasoline, he started looking for an apartment in Little Rock.
“I’m not waiting for it to go to $5 a gallon like they say it’s going to,” he said. Cobb said he hopes to sign a lease Monday.
Tom Kloza, chief oil analyst for the Maryland-based Oil Price Information Service, doesn’t think the price will reach anywhere near $5.
He expects the national average to hit $3.30 by next week to catch up with the crude oil market but says the rapid price increases will not continue. “We had this surge in oil prices related to the Libyan issue, and it led to this little mini-spike,” Kloza said.
Libya is one of the largest oil producers in Africa and produces light, sweet crude, a high grade of oil that is used in gasoline. Saudi Arabia has pledged to increase its oil output to make up for any market disruptions.
Crude oil futures contracts closed Friday at $97.88 a barrel on the New York Mercantile Exchange, up 60 cents from Thursday.
Earlier in the week, the crude-oil price topped $100 a barrel though it didn’t close that high. The Brent crude futures contract, which is the benchmark oil price in Europe, closed at $112.14 a barrel Friday, its highest weekly settlement since August 2008.
Kloza said fear that Middle East turmoil will spread to Saudi Arabia, the largest exporter of petroleum, is part of what is keeping oil prices high. But if the turmoil doesn’t spread, he said, the effects of the current unrest on oil and gasoline prices should be limited.
“If this is limited to Algeria and Libya, and it’s not outright civil war and you can have some sort of manageable production resuming at some point there, or you get a little more from some of the OPEC countries, this should be temporary,” he said.
Kloza predicted that gasoline prices will rise to between $3.50 and $3.75 a gallon as demand picks up during the spring but said that talk of $4 or $5 a gallon gasoline is premature.
Still, even at current price levels, drivers are starting to think about changing their behavior.
Ellen Darr was putting gas in her tank Friday but not filling it up. Ever since gasoline hit about $3.10 per gallon, “I just get about $15 worth and hope it goes down,” she said of the price.
She and her husband commute separately to Little Rock from their home about 18 miles outside the city. If prices go much higher, she said, they’ll start driving in together, even though he usually leaves almost two hours before she does.
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville, said higher gasoline prices can have an effect on the economy.
“Particularly as consumers have become a little more credit-constrained through this recession, their ability to continue spending the same amount as other purchases when gasoline goes up is limited,” she said. And high gasoline prices make other goods more expensive by increasing the cost of shipping.
Deck said $4 is the point at which consumers start making long-term changes in behavior, such as buying more fuel-efficient vehicles.
The state attorney general’s office received dozens of calls this week from people complaining about gasoline prices, according to a news release. Attorney General Dustin McDaniel promised to monitor the situation for price-gouging.
“Like any free-market commodity, the retail price of gasoline is based on factors like supply, demand and competition,” McDaniel said. “ It’s our understanding that these recent increases are brought upon by the increased prices charged to refiners, which gets passed along to wholesalers and then retailers.”
Arkansas law prevents price-gouging during a state of emergency, but retailers are allowed to raise prices if they are faced with higher costs.
The office encouraged consumers to step forward if they have direct evidence of retailers collaborating to “fix” prices at high levels. James DePriest, deputy attorney general over public protection, said that scenario is unlikely in such a competitive market.
“It’s hard to fix prices when you’ve got a lot of competitors,” he said, “One cent in a gallon will drive customers to another station sometimes.”
Price increases were dramatic in some parts of the state. A gallon of gas cost more than $3.23 in the Fayetteville-Rogers-Springdale area Friday, up over 12 cents from Thursday. Fort Smith gasoline prices rose more than 12 cents, on average, to $3.23.
Gasoline in Little Rock was almost $3.20 a gallon Friday, up from $3.09 on Thursday. Pine Bluff prices rose 8 cents to nearly $3.17 Friday, and the price rose 9 cents to $3.18 in Texarkana.
Motorists can go to www.gasbuddy.com to search for the lowest prices in their areas.
Front Section, Pages 1 on 02/26/2011