South Floridians Feel Soar At Pumps Amid Libya Crisis
MIAMI (CBS4)- It's happening all over South Florida, local gas dealers pulling down their old signs and putting up higher prices, and those higher prices are hurting struggling South Florida drivers.
Miami's driver Rachel Prieto said to pay for the price hikes she's looking for a new job.
"Wow, it's causing a lot of damage,' Prieto said.
Some national gas watchers say we're seeing the highest February pump prices since 1990.
According to gasbuddy.com, February gas prices started the month at about $3.09 a gallon and went up slightly through Valentines' day at $3.12 a gallon.
They hit high gear just 5 days later on February 19th climbing past $3.17 until averaging nationally about $3.23 by Wednesday.
According to AAA's national average report, Miami's average price was at $3.22, up 4 cents from last week where the price was at $3.18 a gallon. Fort Lauderdale's average was at $3.18 Wednesday, up 6 cents a week ago.
The highest recorded average price for gas was set at $4.07 back in July of 2008, according to the report.
Some local insiders tell CBS4's Chief Consumer Investigator Al Sunshine that prices are intentionally being driven up by "investors" with no laws preventing it even thought the higher priced oil may be weeks away from the market.
Max Alvarez operates several Gas Stations around South Florida.
He said the "middlemen" are raising prices on dealers, who may be charging more at the pumps, but not seeing any real increase in their profits.
Alvarez added, "My opinion is simple. It's speculators betting on Wall Street that prices can rise and people can pay more."
Sunshine asked "Is it just simple Greed?"
He answered, "In your words, I may have to accept it."
Miami's unofficial high was at $3.55 a gallon mid morning on Wednesday, according to FloridaStateGasPrices.com, a consumer gas Web site. Regular gas prices in Miami ranged from $3.13 a gallon in North Miami, up 4 cents since Tuesday, to $3.55 a gallon in West Miami, up 6 cents.
U-S Energy reserves are reportedly at high levels. So there are no gas shortages.
The only question now is how high gas prices will go and how soon consumers could be seeing $4.00 a gallon gas.
According to FloridaStateGasPrices.com, the Hess gas station on Oakland Park Boulevard in Fort Lauderdale showed figures at $3.09 Tuesday mid-afternoon but that number went up to $3.13 a gallon. Meanwhile, the Chevron on South Federal Highway saw gas prices at the $3.39 range, up 10 cents from Tuesday.
Libya has Africa's biggest oil reserves and has steadily become one of the world's top oil producing nations, but several western operators have already pulled out of the country rather than face the escalating violence, and that's not unusual.
Consumers usually see that the price of crude oil spikes when petroleum rich countries are involved in or experience uncertainty. Some examples include uncertainty in Iraq and an oil workers' strike in Venezuela. The Venezuela strike was settled and production resumed, which further assisting the crude price drop.
US oil companies are still posting huge profits with virtually no regulations covering oil speculators and pricing at local gas pumps.
Some economists warn that consumers are already seeing the effects of higher oil prices on rising food and clothing costs. And there are already early warnings increased energy costs could severely hurt the overall US economic recovery.
Prices vary across Florida cities as they do nationally across regions.
Retail prices are determined by a number of factors including transportation costs, location, average volume pumped and competitive mix.
While the U.S. has the largest refining capacity in the world, Florida does not have a refinery, resulting in higher distribution costs, according to Attorney General of Florida Pam Bondi.
The cost of bringing fuel into Florida is higher due to the absence of both refineries and pipelines.
Gasoline is a classic supply and demand commodity. Higher usage normally translates into somewhat lower supply and higher demand ultimately leading to higher prices, according to Bondi.
Wholesale crudes' up near two year highs, with some prices over $107 a barrel.
Will Hedden, sales trader at IG Index, said the climb may have a global impact.
"We are going to continue to see a knock-on effect form and certainly if the price continues to rise and we see further problems this isn't going to have a good effect at all and it will have the potential to derail the global recovery," he said.
US oil industry analysts said Saudi Arabia has more than enough reserves to make up for Libya's production cuts. But OPEC has said over the past few days it still doesn't think global oil prices are as high as they should be.
US oil reserves remain at high levels so Libya's political problems may not affect South Florida oil prices in the long-run. But the recent spike in oil is already driving up production costs of everything from food to clothing and that's starting to hurt consumers at checkout counters in South Florida and across the country.
