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The University Daily Kansan
Monday, March 29, 1999
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Local prices rise 20 cents in March
Spring breakers feel gas-price hike
By Nadia Mustafa
nmustafa@kansan.com
Kansan staff writer
After several months of record-setting low prices, the cost of gasoline across the nation is on the upswing.
Many students who took road trips during spring break were frustrated when they saw higher prices at the gas pumps.
Ted Kritikos, Lyndon freshman,
said he was disappointed with the
12-cent increase when he drove
home last week.
"It was kind of a downer because they were really really low, but now they're back up again," he said.
gas prices have been increasing for several weeks in anticipation
of the Oil Producing and Exporting Countries' cuts in crude oil production. OPEC nations voted last Tuesday to decrease production by 2.1 million barrels a year for a year.
In Lawrence, unleaded gas prices at many filling stations hovered at around 89 cents per gallon last weekend. Although this marked a substantial increase from the rate of about 75 cents earlier this month, it was still about 10 cents below the national average last March.
Nathan Gronberg, Overland Park sophomore, is a clerk at Texaco Self Service, 1415 W. Sixth St. He said business at the gas station was slower.
"People are still going to drive," Gronberg said. "But I liked it better when it was 79 cents."
In large part, OPEC member nations supported the decision because they have been plagued with budget deficits and other economic woes accompanying the
The price for gas in Lawrence has gone up dramatically in the past few weeks, but it remains below the national average.
Gas prices
Angie Kuhn/KANSAN
lowest gas prices in more than a decade.
If they maintain their commitments, the world market's oil supply would drop by about 2.6 percent. The reductions could increase the cost of driving, flying and shipping products in the United States.
David Faurot, associate professor of economics, said gas prices were still at historically low levels. He
said he could not predict how long the increases would continue or how much prices would rise.
"OPEC has tried in the past over and over again to cut production to increase prices," Faurot said. "But it has failed time after time. In all likelihood, it won't be successful in the future."
— The Associated Press contributed to this story
— Edited by Jon Campbell
Oil-for-food policy for Iraq condemned
The Associated Press
WASHINGTON — More than 100 independent oil and natural gas producers have fanned out across Washington this week, clamoring for federal help for an industry battered by low crude oil prices stemming from a worldwide glut.
Beyond seeking tax relief and other legislative help, the marginal producers and their allies on Capitol Hill are calling on the Clinton administration to change its policies towards Iraq. Under a United Nations policy supported by the United States, Iraq is allowed to sell up to $10.4 billion of oil yearly, with proceeds to be used to purchase food and medicine for the Iraqi people.
"Our rights are being violated by politicians taking care of the Mid-
"There is no good reason why we are bombing Iraq one day, and buying everincreasing amounts of their oil the next."
But domestic producers - who have seen their industry shrink by 50,000 jobs in the last year and watched marginal production drop by 8 percent — contend the oil-forfood program is serving mainly to aid Saddam Hussein while harming U.S. interests.
Rep. Lamar Smith
R-Texas
die EAST," said Ruben Ramirez, a 34-year oil industry veteran from Kermit, Texas, who has been laid off amid the industry's current woes.
Under the oil-for-food program, Iraq can use $600 million a year to rebuild its oil infrastructure and drill new wells, adding to the current oversupply and potentially handing Iraq a tool to destabilize oil markets, producers said at a Capitol news conference Thursday.
"We do not want to argue against ... some kind of relief for the Iraqi people," said New Mexico producer George Yates, chairman of the Independent Petroleum Association of America. "But what we're saying is that the oil-for-food program is skewed. It is government at work, it is not the market at work."
Appearing before Senate committees Wednesday, Energy Secretary Bill Richardson said Iraq's 2.5 million barrel a-day production has negligible impact on U.S. oil prices.
That view was dismissed by the chairman of the Senate Energy and Natural Resources Committee, Sen. Frank Murkowski of Alaska, who noted that when OPEC proposed a similar production cut recently, crude prices jumped $2 a barrel
"We've got to recognize that old reality that charity begins at home," Murkowski said at Thursday's news conference, organized by IPAA. "We've got to support our domestic petroleum industry."
Republican lawmakers denounced U.S. policy towards Iraq as "chaotic."
"There is no good reason why we are bombing Iraq one day, and buying ever-increasing amounts of their oil the next," said Rep. Lamar Smith, RTexas.
IPAA, which represents thousands of marginal producers, is backing legislation that would provide tax credits for marginal production and to return inactive wells to production. The trade group also is urging the administration to pay more attention to independent producers and the energy security they represent for the country.
Marginal producers account for 20 percent of domestic production — a substantial share for a nation that depends on foreign oil for more than half of its energy needs, the independents note.
"The message has to be that the administration will not let this industry collapse," Yates said.
IPAA members met Tuesday at the White House with Vice President Al Gore, Treasury Secretary Robert Rubin, Richardson and other top administration officials. "No promises, much discussion." Yates said, when asked to summarize the meeting.
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The White House is assembling a task force, to be headed by presidential economic adviser Gene Sperling, to examine the state of the industry and possible relief.
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