Area residents cite difficulty dealing with jump in fuel prices

May 09, 2008 09:18 pm

— By Wally Kennedy and Melissa Dunson
news@joplinglobe.com
President Bush blames Congress. The leaders of Congress blame Bush. While the back-and-forth escalates, the prices of gasoline and diesel soar to record highs with no end in sight.
Becky Sturdivan feels the pain at the pump. She said she is paying $120 to $200 a week in gas just traveling to and from her home in Jasper to her job in Joplin. She doesn’t have much hope that prices will go down, and said she can only cross her fingers that it doesn’t become so expensive she can’t afford to drive to work anymore.
“You practically have to have three jobs just to survive these days,” Sturdivan said Thursday, the day unleaded gasoline prices hit another record high at a national average of $3.64 a gallon. The national average is now $3.67 a gallon.
The average price in Missouri on Friday was $3.53 a gallon, according to AAA. Some analysts predict the price will reach $4 a gallon this summer. At least some outlets were posting a price of $3.60 per gallon Friday night in Joplin.
Can anything be done to prevent that? The experts say the answer is: “Not likely.’’
Conventional wisdom would suggest that a reduction in consumption brought about by the steep prices paid per gallon would increase the supply of fuel and that, in turn, would bring down the cost. But there is no assurance that will work what with demand for fuel increasing in other parts of the world, particularly India and China.
What about a summer moratorium on the federal excise tax on gasoline? That tax amounts to 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel.
That approach, favored by presidential hopefuls Sens. John McCain and Hillary Clinton, but opposed by Sen. Barack Obama, might provide some psychological, if not actual, relief.
To Cathy Kelsey, of Liberal, the potential for 18 cents of every gallon of gasoline she buys going back into her pocket seems like the promise land.
“Even if it’s just $50, that’s a lot of money to us poor people,” Kelsey said Thursday.
Any extra money would be a welcome relief to senior citizen Della Kennedy, of Webb City, who has been on a fixed income for several years. As gas prices have gone up in recent months, her checks have not.
“I don’t even know what I’d spend the extra money on; I just know it would help out,” Kennedy said.
But some worry the gas-tax holiday could backfire with higher prices over the long term because the action could trigger an increase in demand.
Federal response
The presidential candidates have also suggested that Bush could temporarily halt the purchase of oil for the Strategic Petroleum Reserve. That measure could decrease demand and increase the supply, especially at a time when the government is paying record prices for a barrel of oil.
Bush earlier this week blamed the Democratic-led Congress for “letting the American people down.” He said he would consider a summer suspension of federal gasoline taxes. He rejected bipartisan suggestions that the government stop filling the nation’s Strategic Petroleum Reserve while oil costs so much, saying it involves such a tiny amount of supply that doing so wouldn’t affect prices.
Bush has said the answer to the energy issue can be found in the long-term fixes that he favors, such as opening a coastal strip of the Arctic National Wildlife Refuge in Alaska to oil exploration and production, and making it easier to build new oil refineries and nuclear power plants. All are Bush priorities that have been stymied in Congress.
Antonia Ferrier, a spokeswoman for U.S. Rep. Roy Blunt, said it is unlikely Congress will consider the gas-tax holiday.
“There have been a fair number of people in the Senate and House who have expressed support for a gas-tax holiday,” she said. “It’s my understanding that Nancy Pelosi, the speaker of the House, has said that is not on the table, and that Sen. Harry Reid, leader of the Senate, has taken that off the table.
“Mr. Blunt has not taken a position on that (gas-tax holiday), but he is willing to look at a variety of options with regard to our energy needs both immediate and long term. He knows it’s the most important issue in Southwest Missouri and around the country that people are feeling.”
‘It will still go up’
John Buchanan, with the Missouri Energy Center, a division of the Missouri Department of Natural Resources, said it is unlikely a gas-tax holiday would push the price of gasoline down.
“It would provide a potentially sizable reduction at the pump if the wholesaler was required to pass the savings directly to consumers,” he said. “But what prohibits the retailer or wholesaler from pocketing the difference instead of giving the actual benefit to the consumer?
“There is also the realistic probability that a lower cost will cause motorists to actually drive more. When you buy more, you stimulate demand and that increases the price. Behavior, right now, is changing demand. It is down in relation to price. Making it cheaper could reverse that trend and encourage people to buy.’’
Eliminating 18 cents from the cost of a gallon of gasoline, he said, could “quickly be negated by the rising price of gasoline. It will still go up, but not as high as it might have gone up.’’
‘It’s just politics’
Some residents like Arnulfo Arredondo, of Sarcoxie, are also skeptical of the long-term help a gas-tax moratorium would provide. He said he isn’t impressed with the offer of saving 18 cents a gallon in a year when the U.S. Department of Agriculture is predicting food prices will go up another 3 to 4 percent.
“It’s just politics,” Arredondo said. “It’s just to make us feel real good. If you’re a truck driver, maybe it would help, but not you and me.”
Mike Right, with AAA of Missouri, said the gas-tax holiday would have a negative impact on highway construction and maintenance. The federal Highway Trust Fund, which pays for road and bridge construction and repairs all over the country, would lose about $10 billion if the gas-tax holiday were adopted, turning a projected surplus this year into about a $7 billion deficit.
“That tax is the main facilitator of highway construction in the United States, and it is in dire need of additional revenue,’’ said Right. “It would be OK if they had a specific mechanism to replace the funds that would be lost. Most states are totally dependent on federal aid for highway improvements.
“That’s my main concern with this thing. It’s a fast fix to a problem that won’t be fixed with a fast fix.’’
Rep. Jim Lembke, a Missouri legislator who represents a south St. Louis district, has added an amendment to a House bill that would lift the state’s 17-cent tax during the summer travel season. That bill has not come up for a reading and will not seek action during this legislation session.
“It’s going nowhere,’’ said Right. “But its sponsors are showing that they are trying to do something about the consumer’s plight. Consumers are not only concerned about the price of gasoline, but the economy in general.
“Consumers are worrying about daily expenditures. It’s not just gas, but food and clothing. Consumers are very anxious about what’s going on right now.’’
As a consumer, Neosho resident Tonis Mathew appreciates the thought. He thinks a gas-tax holiday could be a good idea, but doesn’t come close to addressing the need he and others across the nation are facing every day they drive to work.
“It’s better than nothing,” Mathew said of saving 18 cents a gallon. “But I’ll probably just put that extra money right back into gas.”


Blunt discussion
U.S. Rep. Roy Blunt will conduct a roundtable discussion on gasoline prices at 12:45 p.m. Monday in Joplin. Blunt’s office has asked the management at Hampshire Pet Products, 7502 E. 26th St., to select about a dozen hourly employees at the company to participate in the roundtable. Dan Wadlington, spokesman for Blunt, said the congressman is hoping to meet with a “cross section’’ of people who can talk to him about the impact of gasoline prices on their lives.

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