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Ashland impacted by rising gas prices

Ashlanders will continue to be hit squarely in their pocketbooks as gas prices continue to be driven to near-record levels amid concerns that rising international tensions could disrupt oil shipments from the Persian Gulf.

Locally, the price for regular grade gasoline has climbed nearly nine cents since Oct. 30, to an average of $3.288 a gallon as of Sunday, up from $2.510 a year ago, according to AAA, which bases its averages on fuel prices at 13 Ashland filling stations.

Gas prices are slightly lower in Medford, according to AAA. There, the average is $3.224 a gallon, up from $3.186 on Oct. 30 and $2.374 a year ago. Elsewhere, drivers are spending less to fill up. In Eugene-Springfield, for instance, motorists were paying an average $3.189 per gallon on Sunday. In Salem the average was $3.113, and $3.132 in Portland.

Fuelgaugereport.com, the AAA Web site that tracks gas prices daily across the nation, on Sunday pegged the statewide price for a gallon of regular grade gas at $3.161, making Oregon's gas prices the sixth-highest in the nation.

For diesel, the statewide average price is hovering at $3.576 per gallon, up more than 43 cents per gallon in the last month, according to the Web site.

Drivers irked

Some motorists, fed up with steep gas prices, are eschewing their cars to make short jaunts as gas prices creep toward $4 a gallon. Others, meanwhile, are opting for more fuel-efficient cars and some are using more public transportation.

In fact, nearly six in 10 people say their driving behavior has changed in the wake of rising prices at the pump, according to a poll released last week by the Bethesda, Md.-based Automotive Aftermarket Industry Association.

James Nolan, a sales manager for the Butler Automotive Group isn't so sure. He said in terms of new car sales at the company's Ford dealership in Ashland, the "perceived need" for traditional gas-guzzling SUVs and large-model trucks among consumers "trumps" their concern of skyrocketing fuel prices.

"I still sell the F-150s (trucks) and the big SUVs," Nolan said, noting that sales of fuel-efficient cars account for only a "small portion" of sales.

Impact on tourism

In addition to irking motorists and business owners, Ron Fox, executive director of Southern Oregon Economic Development Inc., said the regional economy is suffering as a result of global petroleum prices.

Should gasoline prices continue to linger above $3 a gallon, Fox said there is "a good possibility" that tourist visits to the Rogue Valley could dip since the overwhelming majority of visitors to the region drive here.

"People drive to Ashland to enjoy the Shakespeare, people drive to Grants Pass to enjoy the Rogue River and the Oregon Caves, and they drive to Crater Lake; so, higher cost of gasoline will surely have an impact on people's decisions as to how far they are going to travel for recreation," he said.

Strife Makes Markets Uneasy With oil traders concerned about possible United Nations' sanctions against Iran over its nuclear program, a weak U.S. dollar and tight petroleum supplies, crude oil prices have risen about 40 percent since late August, AAA Oregon spokeswoman Marie Dodds said in a statement.

Peak prices

If the trends continue, she said the average price of gas could break the record statewide high set on May 18 of $3.413 before the end of the year.

On Friday, the contract price of light sweet crude oil closed at $96.32 on the New York Mercantile Exchange, up 90.8 percent from its lowest point this year but below the inflation-adjusted record-high of $101.70 set in April 1980.

Prices Climb Professor John Damis, director of the Middle East Studies Center at Portland State, said there is plenty of reason to believe that oil prices will continue on their upward trajectory.

In a telephone interview Sunday, Damis, a political scientist, said the "saber rattling" between the Bush administration and Tehran is mostly to blame mostly for the recent rise in retail gasoline prices.

"There is no easy solution to the nuclear issue so this makes people uneasy in the international oil market," Damis said, adding that over the coming weeks and months, oil prices could be driven even higher by international strife.

Damis said since the Iranian government could essentially choke crude oil shipments through the Strait of Hormuz, which lies between Iran and Oman, oil traders are paying close attention to diplomatic developments.

About one-fifth of the world's oil consumption, or roughly 17 million barrels of oil, moves through the strait daily, so even whispers of a potential disruption wreaks havoc with the world's oil markets.

"I don't think that this is something that is going to go on for years and years, but at least until January 08," Damis said, referencing the Nov. 2008 presidential election as the "next big turning point."

covers politics for the Ashland Daily Tidings. You can reach him at csrizo@hotmail.com.