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Published: 3/12/2008

Gasoline prices soar, edge closer to $4 a gallon

BY DAVID PATCH
BLADE STAFF WRITER
Toledo's current retail gasoline prices are nearly $1 higher than they were a year ago. Toledo's current retail gasoline prices are nearly $1 higher than they were a year ago.
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Jacobs Jacobs
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Kim Giarmo of LaSalle, Mich., buys gas for $3.299 on Alexis Road. She says her husband commutes to Detroit every day.
Kim Giarmo of LaSalle, Mich., buys gas for $3.299 on Alexis Road. She says her husband commutes to Detroit every day.
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Joseph Fields of Dearborn Heights, Mich., says he s watched diesel prices climb with every trip to the
Jeep plant for his employer in Romulus, Mich.
Joseph Fields of Dearborn Heights, Mich., says he s watched diesel prices climb with every trip to the Jeep plant for his employer in Romulus, Mich.
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Randy Daniels says gas prices have caused him to change his driving habits. Randy Daniels says gas prices have caused him to change his driving habits.
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Jeff Jacobs might have used his unexpected March vacation to visit relatives and attend a Kid Rock concert in Virginia, but the once-again skyrocketing price of gasoline changed those plans.

"I'm just going to have to watch everything I buy and cut back," Mr. Jacobs said yesterday while filling up at a Meijer station on Alexis Road that was one of the last in the area to hike its price.

While Meijer charged $3.149, the price for self-service regular at the BP across the street had climbed to $3.459 a gallon, a number that became increasingly common across the area throughout the day and was just a few cents shy of the $3.499 peak that occurred at many Toledo stations last May.

"Yesterday, it was $3.299 - what a joke," said Peter White, of South Toledo, as he pumped BP gas into his car.

And Kim Giarmo, from LaSalle, Mich., said she doesn't expect a big consumer-spending bump from that tax "rebate" the Bush Administration will distribute late this spring because at her house, "It's going to be used to pay our bill for gas."

Mr. Jacobs is one of nearly 1,300 workers at GM Powertrain's nearby transmission plant that have been laid off because of a strike at an axle plant that supplies General Motors.

Production of the plant's traditional rear-wheel drive transmissions already had slowed because of big-vehicle sales dampened by pricey gasoline, Mr. Jacobs said, and now a 40-cent jump in gas prices over the last five days means he can't afford to travel during his unplanned time off.

"It's ridiculous. Where's it going to end?" Mr. Jacobs wondered.

With the heavy summer driving season still to come, that question definitely remains open.

Toledo's current retail gasoline prices are nearly $1 higher than they were a year ago, and that's with the switch to costlier pollution-controlling summer fuel blends and summer demand still to be factored in.

Light sweet crude for April delivery yesterday surged to a new trading record of $109.72 on the New York Mercantile Exchange before retreating after the Energy Department and International Energy Agency cut crude consumption forecasts for this year.

Futures settled 85 cents higher at $108.75 a barrel, a new closing record.

Those records translated into a record national average price for self-service, unleaded regular of $3.2272 a gallon, according to AAA, and auto club spokesman April Cochran acknowledged that the price sample was taken at 3 a.m., before any pump-price increases posted later in the day would be reflected.

The previous record was $3.2265, set last May.

While rising crude and retail gasoline prices have prompted widespread speculation that gasoline might hit $4 a gallon later this year, Ms. Cochran said AAA does not currently share that opinion.

"We're projecting a spring peak of between $3.50 and $3.80 per gallon [for the national average] and, after that, a gradual 15 percent decline over the summer," she said.

But if accurate, AAA's conservative forecast still would represent even higher price records for motorists weary of higher driving costs.

Diesel fuel already has hit the $4 mark, or very close to it, in many places. At the BP at Alexis and Hagman roads, yesterday's new price for diesel was $3.999 a gallon.

Joseph Fields, of Dearborn Heights, Mich., said he's watched diesel climb every trip he makes to the Chrysler Jeep plant in Toledo for his employer, International Paint Stripping, of Romulus, Mich.

And while he's still working, Mr. Fields said he knows several independent truck drivers who have had to park their rigs because fuel costs so much, or drive even more to make ends meet.

"They can't raise their rates, but their costs go up. When that happens, you're not bringing anything home anymore," he said.

Mr. White, the owner of Costin Industrial Equipment, said gasoline's rising price affects both his business and his family.

"We do a lot of travel to serve our customers, and we end up passing the higher costs along to our customers," he said.

At home, he continued, "We've cut back on taking long trips, we don't go out as much. It all comes out of our budget."

After seeing the $3.459 sign across the street, Randy Daniels, of Erie, Mich., was willing to wait at Meijer's for its cheaper gas before it, too, raised its price. He already has changed his driving habits because of fuel costs.

"I don't drive my truck. I drive the wife's car now," he said from the driver's seat of a Mercury Milan sedan.

Ms. Giarmo said she and her husband are doing their best to cut expenses because, while she works near home, he commutes to metro Detroit every day.

"We're trying to be more conservative," she said while buying gas for $3.299 at a Sunoco station on Alexis near Bennett Road. "We try to make one trip and try to do all our things at once. We have a cabin up north, and I don't know if we'll be using it that much this year."

Ms. Cochran said auto-club members aren't canceling vacations - the auto-travel department that prepares itineraries has "been so busy lately" - but they do seek economies in other travel costs so they can afford gasoline's higher price. "They stay with relatives, they don't eat out [at restaurants] as much. They might even bring food with them," she said.

Ms. Giarmo said she feels double-teamed because, along with paying more for fuel, the roads she drives get rougher and rougher.

That problem also could persist for awhile because asphalt, the binding ingredient in blacktop paving mix, is a petroleum product and its price has sharply risen in recent years.

David Welch, Toledo's commissioner of streets, bridges, and harbor, said the most recent price hikes won't immediately affect city street repairs because supply contracts are in place, but almost certainly will come into play when new bids are sought in May.

Suppliers have the option to renew, but you know they're not going to renew, Mr. Welch said.

Information from the Associated Press was used in this report.

Contact David Patch at:

dpatch@theblade.com

or 419-724-6094.



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