Nantucket shares honor of highest gas price in nation
BY MARY LANCASTER INDEPENDENT WRITER
As of yesterday, Nantucketers were paying as much to fuel up their cars as those in Big Sur, Calif., on Friday Harbor, an island off the coast of Washington state, and on Maui, Hawaii.

The four locations share the dubious honor - in spite of published reports that California drivers pay the most - of having the highest gasoline prices in the country.

On Tuesday, the cheapest gallon of regular on Nantucket was $3.64 at On-Island Gas. At Mid- Island Gas it cost $3.71; at Hatch's it was $3.69; and Airport Gas was charging $3.72.

According to a Nantucket Independent survey of gas stations on other islands which also require fuel to be shipped, we are now on a par with Friday Harbor. Block Island has almost caught up to Nantucket, and stations in Edgartown and Oak Bluffs on the Vineyard are running five to 12 cents under Nantucket's lowest price.

Although the island's pump rates are close this week to what other resort areas are charging, the picture may change in another week when Nantucket receives a new gas delivery. Until then local prices may actually be lower than in some places because many off-island locations have deliveries on a more frequent schedule - and as the price of crude oil spikes, so do their pump prices. Because shipments only arrive here approximately every three weeks, if the price goes up substantially islanders will have to live with it for a while. Industry analysts predict that for a variety of reasons the cost of gas could jump as much as 20 cents a gallon by December.

Though some news reports on Monday and Tuesday list California as paying the most for gas, on Tuesday one station in coastal Carmel was charging $3.64 - the lowest Nantucket price - and a competitor a few miles away was charging $3.63. The price of regular in Friday Harbor, Wash. was also at $3.64 compared to $3.58 on Nov. 1 and $3.54 on Oct. 29.

"It's really been spiking and we see no end in sight," said a Friday Harbor, Wash. station spokesperson, who explained that their gas is delivered by barge. "For us it's all volume and the way it's delivered."

Astation on Block Island, R.I. was charging $3.59 for regular yesterday but was expecting a new delivery last night that would bring a price change. In Oak Bluffs one station reported a price of $3.52 and another of $3.54 a gallon, whereas in Edgartown it was $3.59 at two stations with that price potentially set to jump last night as much as 10 cents, said a spokesperson who did not want to be identified. Playing devil's advocate, he said he did not think $3.64 a gallon on Nantucket was such an outlandish price.

"On Nantucket the reason why the price is so high is that the cost of doing business as a gas station is the same or more than, say, in Hyannis where they pump 10 times more," he said.

In contrast, two stations in Key West, Fla. were charging $3.13 and $3.30 yesterday. Energy analyst Mary Novak with Waltham's Global Insight Resource Center has faith that in the upcoming few weeks changes in market speculation will help return gas prices to those Florida levels or lower.

"Blame it on crude," she said without hestitation. "It has been an odd year. Prices peaked a couple days ago at $96 a barrel [for crude oil], so the question is whether the price at the pump is strictly a function of how much global crude oil costs or is there something special going on that creates extraordinary prices just in the gasoline market?

"Since July the price at the pump is just reflecting the price of crude oil," Novak added, explaining that yesterday's crude price was $92 a barrel which translates to $2.20 on a cents per gallon basis with the cost to refine crude into gas at about 15 to 20 cents a gallon.

"The difference in the pump price includes dealer profit margins, taxes and distribution costs. Nobody up the line is making more money than they normally would. The only people who are making money are the crude oil people," she said.

Novak said the price of crude is indicative of a tight global supply that has not kept pace with demand, specifying that while current world-wide demand stands at about 88 million barrels per day the available supply is just 89 million barrels daily. There are other elements contributing to the price, one of which Novak anticipates will shift.

"In the last couple of weeks people have been paying more for crude because of storms in the United Kingdom that reduced production. Also, there is a lot of political tension in the producing areas, and now because of the uncertainties associated with economic performance and currencies you have a lot of speculators switching from currency to commodity markets - gold, oil. Over the last three weeks all commodities have increased because of speculation in the market," Novak said. "Our forecast is that speculators will be leaving the commodities market in the next weeks and the price [of crude] will go back down into the $70s and $80s. When that happens

the price of gasoline will fall back." I