Dodging claims of ‘gouging,’ gas turned off

Published 12:00 am Tuesday, September 16, 2008

As nearly all oil production in the Gulf of Mexico remained shut in due to Hurricane Ike, at least one operator of unbranded gas stations in Vicksburg shut in his supply in the name of taking care of loyal customers.

“I’d rather be out of gas than for people to think I’m gouging them,” said Jay Tidwell, co-operator of the local Super Junior locations.

Such stations are often a bit cheaper when storms don’t threaten offshore supply sources. To keep overall business afloat, some gas pumps will stay under wraps until conditions improve.

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Fuel remains in the ground at the family-run chain’s location on Oak Ridge Road, but is not being sold — indicative of the higher prices for wholesale gas paid by unbranded retailers in the past several days.

Another seller of unbranded gas, Mac’s Gas on Drummond Street at Belmont, this morning was selling premium gas only, at $3.94. Mac’s operates a chain of gas stations in the Jackson metro area, and prices there Monday were reported to be as high as $5.17 for unleaded.

Referred to in the business as the “spot” market, independent stations purchase gas daily from surplus production. Suppliers to retailers such as Super Junior have increased prices on the fuel they sell by about 80 cents per gallon.

Larger chains offering brand-name fuel often purchase monthly on set contracts. At Super Junior’s Chevron station at 1490 U.S. 61 North and Texaco-branded outpost on Fisher Ferry Road, fuel was being sold this morning, with regular offered for $3.79 a gallon. A fourth station, a Chevron on Halls Ferry Road co-owned by Tidwell but not under the Super Junior name, offered only regular and diesel.

Most stations in Vicksburg reported regular unleaded selling for between $3.77 and $3.79 this morning.

Statewide, prices in Mississippi have risen about 20 cents a gallon, according to AAA. Regular gas averaged $3.81, compared with $3.61 before Ike came ashore in Texas over the weekend. Pump prices in Jackson varied wildly depending on the brand, anywhere from $3.79 to $4.49. Wholesale prices are in the $4.50 to $4.75 range, before taxes and other costs.

Ninety-nine percent of oil production and about 94 percent of natural gas production in the Gulf remains shut in, according to the Minerals Management Service, part of the U.S. Department of Interior that manages the nation’s natural resources.

Of the 121 rigs operating in the Gulf, personnel from 82 remain evacuated. Workers on about 78 percent of the 717 manned platforms in the Gulf also remain evacuated.

Oil prices fell below $92 a barrel today in Asia, in part due to lingering concerns on the U.S. credit crisis. Light, sweet crude for October delivery fell overnight in electronic trading on the New York Mercantile Exchange, to $95.71, marking the first time oil closed below $100 since March.

The decrease came despite political unrest in Nigeria, where militants attacked with explosives an oil-pumping station operated by Royal Dutch Shell PLC, killing at least one guard and injured four others as battles between the armed forces and militants intensifies.

Crude has fallen about $55 — or 37 percent — from its all-time trading record of $147.27, reached July 11.

In other trading, diesel futures fell 8.08 cents to $2.71 a gallon, while gasoline prices dropped 7 cents to $2.49 a gallon. Natural gas for October delivery fell 8.4 cents to $7.29 per 1,000 cubic feet.

In London, October Brent crude fell $2.33 to $90.27 a barrel on the ICE Futures exchange.