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Gas prices pick up speed

Oregon no longer leads the nation, but fuel distributors say increase pumps life into business

Gas prices are soaring again.

If you didn't make that relatively inexpensive trip to Arizona in January or February, you missed the oil industry's version of bargain days.

The Rogue Valley isn't alone - prices have increased across the country.

AAA reports the national average price for a gallon of regular unleaded is now $1.227, the highest since Nov. 8 of last year. The statewide pump price average for regular unleaded has jumped a nickel in the past month and stands at $1.252.

Unlike much of last year, Oregon's prices no longer top the 48 contiguous states. A dozen states have higher averages, led by California at $1.47.

"According to industry analysts," said AAA spokesman Elliott Eki, "a recent government announcement that we're moving out of the recession seems to be the cause of the fast price rise. The continuing violence in the Middle East, the ongoing and possibly escalating war on terrorism and the conversion to the more costly, cleaner-burning summer blends are other pricing influences that must be watched."

Crude oil prices are approaching $24 a barrel, but that's still well below the $28 price last year.

Clay Ver Bryck, who with his wife, Jennifer, owns C&J Super Service Shell at 3602 N. Pacific Highway, said the rising price may bring sales and costs at local pumps back into line.

"We've been selling for below our cost for three months," said Ver Bryck, who also runs an accounting business. "We paid a buck-35 for a load (Thursday) and we're selling it for $1.19."

He said there were two periods last year in which his costs exceeded pump costs.

"The prices we've seen in Grants Pass are realistic and where we should be. But they don't have a Costco," Ver Bryck said. "When everyone else was selling for $1.15, they were selling for $1.05 - they were losing at the pump. But their philosophy is that they'll make it up at the store.

"It's good for the consumer, but as far as a business person is concerned, it's not."

Last week, the Wall Street Journal reported the energy department predicted a 15 percent rise in gas prices because of resilient demand and a concerted effort by refiners to reduce production.

The energy department, however, predicted pump prices would still be well below last year's average prices of $1.62 a gallon in June and $1.42 a gallon in July. But prices could climb more if refiners encounter unexpected situations like refinery fires or pipeline problems.

Medford Fuel owner Bill Terpening was out of town, but faxed a statement supporting Ver Bryck's assertion that Costco and other major retailers are able to sell below cost in Oregon. They're able to absorb the loss, but independent dealers aren't.

Big box margins are razor thin, Terpening noted, and "so are all competitors in the gas business."

In Washington and Idaho, the per gallon average is about $1.21; in Nevada, it's $1.35. Georgia remains the most pocketbook-friendly state - at just under $1.10 a gallon. The steepest increase in recent days -15 cents a gallon - was recorded in the Great Lakes region. In New England, prices increased by less than 4 cents per gallon.

Reach reporter Greg Stiles at 776-4463 or e-mail