Oil experts explain gas woes and what students can do

Brian Collins, senior political science major, puts gas in his car at Sheetz. Collins said gas prices played a significant part in his decision to either commute or live on campus. Tracy Tucholski | Daily Kent Stater

Credit: Ron Soltys

Senior theater major William Scott pays more attention to a car’s gas mileage than its appearance. That’s why he bought a hybrid last year.

“I saw it as a possible way to save money,” Scott said. But like many students, Scott still has a difficult time paying high prices at the pump, sometimes cutting back on traveling to Cleveland to see his parents.

Ohio economist Ken Mayland said drivers don’t need to suffer from the high gas prices. Finding a solution to handing over your life savings to big oil is simple, Mayland said.

“Don’t fight them, join them,” he said.

His advice is to make a profit from the soaring gas prices.

“If you’re fearful of increases in energy prices, buy some shares of Exxon Mobile,” said Mayland, who said he’s made thousands doing so.

“I’ve been a long-time holder, and I’ve done very well,” he said.

For students who don’t have an extra $86 to buy a share of Exxon, there are other ways to cut down on gasoline use. Casey Anderson, senior integrated science major, owned a bicycle long before gas prices became unbearable. Now, he said, his hobby of riding has also become a convenience.

“I ride my bike all the time now — even when it’s freezing out or if there is snow on the ground,” he said. Anderson resorts to driving his Jeep only when necessary.

Why the high prices?

While Congress has drilled big oil companies on the price of gas, Mayland said the companies are not at fault.

“Oil companies are on the receiving end of the price,” he said. “Sometimes they profit immensely. Sometimes they don’t.”

The reasons behind the high cost of gas are debatable. Mayland said the growing international demand for gas is the real cause.

“All energy prices are going to get more and more expensive because the international demand for energy is rapidly increasing,” he said, adding it would take a recession in China, a country using very high amounts of oil, to lower the international price of oil.

Oil analyst George Littell is on the other side of the argument. He said it’s the supply.

Littell blames the International Energy Agency for the soaring prices, who he said made an “unintentional mistake.”

Based on the agency’s optimistic forecast of greater use of alternative fuels, Saudi Arabia and other countries produced almost a billion barrels less from 2006 to 2007, Littell said.

While experts argue over supply and demand, a definite cause for the increase is the shortage of oil refineries, Mayland said.

For crude oil to become gasoline, it must go through domestic refineries. Because of maintenance and the effects of hurricane Katrina in 2005, many refineries are either shut down or temporarily closed causing the decline in gasoline supply, he said.

Where they’re going?

While there may be many variables behind the high gasoline prices, Littell and Mayland both agree we shouldn’t see many extreme price peaks the year, unlike in 2007.

“We should level out around $3.50 for the summer,” Littell said.

The U.S. Energy Information Administration, which gives the government’s official energy statistics, forecasts prices to be slightly lower than that.

But at the same time, an AAA spokesman told The New York Times in February that gas prices could hit $4 per gallon this summer.

How high do prices have to go before students stop driving? Scott said $4 is his limit.

“If prices reach that high, I will buy a brand new bicycle,” he said.

Filling up for less

• Buy gasoline during the coolest time of day — early morning or late evening is best.

• The best day and time to buy gasoline, from a pricing perspective, is Wednesday morning.

• Most stations generally raise or lower their prices in the morning — around 10 a.m. Expect a rise to occur on Thursday morning.

• Choose type and brand of gasoline carefully. Certain brands provide you with greater economy because of better quality.

• Avoid filling the gas tank to the top. Overfilling results in sloshing over and out of the tank.

• Avoid purchasing at exit ramps for highways — especially during holiday travel — because of high prices.

• If you have to buy on the highway, try to buy at the border stations when traveling between states.

Source: Gaspricewatch.com

Contact public affairs reporter Erica Weisburn at [email protected].