Drivers Paying Record Gas Prices

NEW YORK (April 21) - Rising gasoline prices tightened the squeeze on drivers Monday, jumping to an average $3.50 a gallon at filling stations across the country.

Retail Stores Closing

    Store: Mrs. Fields
    Why? As a tough economy forces consumers to limit their discretionary spending on items like cookies, Mrs. Fields prepares to file for Chapter 11 bankruptcy. The company, which has faced a number of franchise store closings since 2004, may need to close more as it reorganizes.


    Store: Limited Too
    Why? Citing weak sales, Tween Brands Inc. plans to close 26 of its Limited Too preteen stores and convert 560 to its lower-priced Justice brand.

    Mark Lennihan, AP

    Store: Steve & Barry's
    Why? It appears that Steve & Barry's will get a second shot, as Bay Harbour Management, which specializes in turning around distressed and bankrupt properties, offers to buy out some of the teen apparel retailer's assets. The Port Washington, N.Y., had filed for Chapter 11 bankruptcy protection last month and could have closed most if not all of its 276 stores.

    Mark Lennihan / AP

    Store: Boscov's
    Why? The Boscov's at the Monmouth Mall in Eatontown, N.J., is one of 10 locations the chain -- the nation's largest family-owned department store -- announced it will shut down.

    Mike Derer, AP

    Store: Bennigan's, Steak & Ale
    Why? The Bennigan's and Steak & Ale restaurant chains, owned by the Metromedia Restaurant Group, filed Chapter 7 bankruptcy protection, in which a company seeks to shut down and liquidate its assets. Bennigan's indicated in the filing that it has 38 outstanding creditors and will have no funds remaining after they are repaid.


    Store: Linens 'n Things
    Why? In a sign that its fortunes are beginning to turn, retailer Linens 'n Things, which filed for bankruptcy in May, announced that it would close fewer stores than it had anticipated. The chain will shut down 57 stores in its latest restructuring, 30 fewer than it had originally planned to close. Combined with its list of 120 closings announced along with its bankruptcy filing, the company will close a total of 177 stores.

    Richard Lee, Detroit Free Press / MCT

    Store: Mervyns
    Why? The future is in doubt for the low-end department store chain, which has been steadily closing stores since its purchase by several private equity houses in 2005. Mervyns' shelves are thinning as vendors and lenders have held up shipments and financing after the shop fell silent about its finances.

    Douglas C. Pizac, AP

    Store: Starbucks
    Why? After years of ambitious expansion, the coffee retailer plans to close 600 U.S. stores, most of which were opened only in the last two years. Starbucks says it will try to place affected employees in neighboring coffee shops.

    Paul J. Richards, AFP / Getty Images

    Store: Goody's Family Clothing
    Why? Tennessee-based Goody's announced June 9 that it was filing a voluntary petition for Chapter 11 bankruptcy reorganization in Delaware, where the company is registered.The company will also close 103 stores.

    Store: A.C. Moore Arts & Crafts
    Why? Citing the current tough retail environment, the East Coast crafts retailer said it was closing 5 to 7 percent of its 139 stores and will rein in plans to expand.

    A.C. Moore

Crude oil, meanwhile, set a new record of its own, spiking after an attack on a Japanese oil tanker in the Middle East to close above $117 a barrel for the first time.
"It's killing us," said Jean Beuns, a cab driver in New York who estimated he is making $125 to $150 a month less than in the fall because of costlier fuel. "And it was so quick. Every day you see the price go up 5, 6, 10 cents more."
Diesel prices at the pump also struck a record high, of $4.20 a gallon, according to AAA and the Oil Price Information Service, putting pressure on truckers and other shippers who rely on the fuel to transport goods to market.
Prices are expected to keep climbing as they trace the path of crude, which has surged to new records for six trading sessions in a row. Oil prices are rising along with a host of commodities, from corn and wheat to gold and platinum, that are enticing speculators seeking hedges against a weakening dollar.
Light, sweet crude for May delivery rose to a record $117.76 a barrel on the New York Mercantile Exchange before settling at $117.48, up 79 cents from Friday's close.
Nationally, retail gas prices jumped more than a nickel over the weekend, and are up 23 percent from a year earlier. Drivers are paying the lowest prices in New Jersey and the most in California, where a gallon of regular is now averaging $3.86 for a gallon.
For motorists, the worst may be still to come. That is because the summer driving season, when demand is at its greatest, has yet to begin.
"People want to drive, they need to drive, they have to go to their job," said Samer Katib, manager of a Marathon station on Chicago's South Side. "But people who would drive around or go places for fun, they're not doing that any more. It's just go to your work and go home."
The Energy Department predicted earlier this month that monthly average gasoline price will peak at over $3.60 per gallon in June and could possibly reach the $4 threshold.
"It's uncharted territory," said Tom Kloza of the Oil Price Information Service, Wall, N.J. "I don't think we're done, but I have to believe we're in the eighth or ninth inning" of price increases.
The higher prices are already prompting some drivers to cut back.
In New York, Elvis Ragbir and Anthony Winckler said they are driving less and taking the subway more.
"I'm spending all my gas money on MetroCards," Winckler said in the waiting room of a vehicle inspection station in Manhattan. Ragbir, a delivery truck driver, said he is looking to trade in his Lexus LS 400 for a smaller car.
In downtown Chicago, Sharon Cooper spent $52 to fill up three-quarters of the tank in her Toyota Highlander SUV. She said she tries not to let the prices get to her, although she also is changing her habits: "I am buying a bike to commute to work this summer," she said.
Energy Department data show gasoline consumption fell more than 1 percent during the four weeks ended April 11, compared with the same period a year ago.
That change in consumption patterns, while not drastic, is significant, said Mariano Gurfinkel, project manager at the Center for Energy Economics at the University of Texas at Austin, who expects per-capita demand to drop further this summer if gas prices rise or even remain at the current levels.
Americans will continue to drive, but some may change a summer vacation destination as gasoline costs continue to make a bigger dent in their pocketbooks, Gurfinkel said.
Crude prices came under increased pressure Monday after the 150,000-ton tanker Takayama was struck off the coast of Yemen as it headed for Saudi Arabia, its Japanese operator, Nippon Yusen K.K., said in a statement posted on its Web site. None of the ship's 23 crew members was injured, but several hundreds of gallons of fuel leaked before a 1-inch hole in the tanker's stern was repaired, the company said.
Kyodo News agency reported that the Japanese tanker was fired on by a rocket launcher from a small boat.
"There's clearly some geopolitical tension in the market," said Mark Pervan, senior commodity strategist at the ANZ Bank in Melbourne, Australia. "This will die down, but the market is pretty jittery at the moment."
Adding to the worries were claims Monday from the main militant group in Nigeria's restive south that it had launched two more attacks on oil pipelines in the region. Attacks since early 2006 on Nigerian oil infrastructure by the militant group have cut nearly one-quarter of the country's normal petroleum output, boosting oil prices. Nigeria is a major supplier to the U.S.
Comments over the weekend by an OPEC official that the group was not likely to increase production also supported prices Monday. Abdalla Salem el-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said Sunday that oil prices would likely go higher and that the group was ready to raise production if the price pressure was due to a shortage of supply - something he doubted.
"Oil prices, there is a common understanding that has nothing to do with supply and demand," el-Badri said on the sidelines of an energy conference in Rome.
In other Nymex trading, heating oil futures rose 1.9 cents to settle at $3.3114 a gallon while gasoline futures fell about a penny to settle at $2.9791 a gallon. Natural gas futures jumped 14.6 cents to settle at $10.733 per 1,000 cubic feet.
Associated Press Writers Dave Carpenter in Chicago, Dan Caterinicchia in Washington, Pablo Gorondi in Budapest and Thomas Hogue in Bangkok, Thailand, contributed to this report.
2008-07-21 15:51:28
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