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More and more money for oil

Becky Bosshart
Appeal Staff Writer
Dennis Baggett, of Missoula, Mont., stops in Carson City on Friday afternoon to fill up his Bounder Fleetwood recreational vehicle. Baggett said he'll keep driving even though gas prices are high, but he'll complain about it. Rick Gunn/Nevada Appeal
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Dennis Baggett pulled his giant Bounder Fleetwood Recreational Vehicle into an open space at the North Carson Street Arco AM/PM and took out his debit card.

It’s time to pay the price for his semi-retirement tour of the West Coast with his cat, Skidder. A blue Ford 4X4 is hitched to the RV. He takes up the entire side of a pump island.

“It’s greed by the oil companies,” the 68-year-old lone traveler said.

The Missoula, Mont., native stuck the nozzle into his gas tank and watched the digital counter. Thirteen gallons and $34 later, he’s ready to park near Carson City for a couple of days.

The most he spent on a gallon of gas was $3.20 in Victorville, Calif. How much does it take to fill his tank?

“I don’t want to talk about it,” Baggett said. “But I’ve put about $170 worth in today.”

Still, he isn’t going to curb his gasoline consumption.

“I’ll just cuss a lot,” Baggett said.

Counting the cost

On Friday the average price for a gallon of unleaded gas in Nevada was $2.49, according to AAA Nevada, which tracks national and state averages. This is a concern for Tom Sortore, operations manager for Silver City RV Resort in Minden.

“With gas prices like they are now we definitely see a slowdown in fuel sales and, obviously, as an RV park, people aren’t traveling as much. There’s no doubt about it,” he said.

On Friday, Silver City’s price for unleaded gas was $2.55. When customers stay away because of high fuel costs, that means they also don’t come into the convenience store.

“We’re selling within pennies of the cost to us,” Sortore said. “And that’s the truth. We’ve changed our prices four times over a six-day period due to the constant increase in cost.”

Madeline Reutzel, owner of the Virginia City Station, said her local gas customers have resigned themselves to increasing gas prices. They need the gas.

“They complain, but there’s not a damn thing you can do about it,” she said.

Businesses that require mobility, such as Capital Carpet Care of Carson City, are feeling the pinch.

“It’s way too much money,” said owner Juan Toledo. “I spend from $15 to $20 a day on gas.”

For his small carpet-cleaning business, that’s a daily increase of $3 in just over a month.

Why is the cost of gas increasing?

The upward trend in gas prices began in mid-January and hasn’t relented, an AAA Nevada spokesman said. Advocates for both the automobile industry and oil companies agree that the high price of crude oil is directly related to gas costs. AAA has reported high-gas-price records almost daily since January.

“Crude oil is about 50 percent more expensive now than it was last year,” AAA spokesman Sean Comey said. “In mid-January the average price of gas was $1.85. So it’s gone up a lot.”

And crude oil is high – $53.30 for a barrel on Friday – partly because of supply and demand, a spokesman for oil refineries said.

Dave Fogarty, spokesman for Western States Petroleum Association, said high oil demand in Asia contributes to increased prices. Oil refineries are some of the members of his association. Fogarty said he gets all his information from the Energy Information Association, which is under the Department of Energy.

“The economies in Asia and China are growing quite dramatically, so China is importing more and more oil,” he said.

World affairs – particularly in high-oil-producing nations such as Nigeria, Venezuela and Iraq – also affect the supply chain. Refinery output and the condition of the pipeline system also affect gas prices. But the efficiency of all those components don’t necessarily equal low gas costs.

“We’re heading into a time of the year when people are driving a lot and we’re already at the record high,” Comey said. “So, if nothing else changes we’re likely to see prices continue to rise. However, if the price of crude oil comes down considerably, people can expect to see the benefit trickle down to the pumps.”

AAA doesn’t adjust the cost of gas with inflation. Comey said the argument that gasoline costs less today than it did in the 1980s because of inflation is often made by those who are making a profit by selling gas.

Fogarty said if gas prices are adjusted for inflation then they are lower than the cost in 1981 – when the government last controlled gas prices – but that doesn’t mean much for those who have to part with the extra cash.

n Contact reporter Becky Bosshart at bbosshart@nevadaappeal.com or 881-1212.