FALMOUTH — Penny Snow figures she and her husband might have to shell out some extra money now to save some cash later.

Snow’s husband, who works at the Portsmouth Naval Shipyard in Kittery, called her Tuesday morning after completing his 50-mile commute from their home in South Portland to say they need to think about buying a new car.

Not that there’s anything seriously wrong with the Ford Taurus her husband currently drives, Snow said – except the mileage.

“We’re thinking about a Volt or something,” Snow said, referring to Chevrolet’s electric car as she filled up her minivan Tuesday with $3.759-a-gallon gasoline at an Irving Station on Route 1.

Gas prices are at their highest point ever for this time of year – the state average is $3.699 per gallon, according to AAA. And it is still a couple of months before gas prices traditionally rise with the onset of the summer driving season. Analysts say we may soon look back wistfully at gas prices below $4 a gallon.

Parking the car and staying home doesn’t provide much solace. Average home heating oil prices have flown past the $3.50-a-gallon threshold and are still rising as well – the statewide average was $3.79 a gallon Monday, according to the Governor’s Office of Energy Independence and Security.

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“The whole complex (of oil prices) is moving that way,” said Jamie Py, executive director of the Maine Energy Marketers Association. “That’s a lot of money leaving people’s pockets.”

And the exodus of cash from those pockets is likely to continue, said Ben Brockwell, director of data pricing and information services for the Oil Price Information Service, which tracks the oil, gasoline and heating oil markets.

Brockwell said the retail market has yet to reflect crude oil prices that have been climbing sharply since early winter.

“Four dollars (a gallon) is certainly likely by May,” he said.

Brockwell noted that demand isn’t shaping the market, because gasoline use is typically lower this time of year and the mild winter has cut into heating oil demand – it’s off by about 20 percent from a typical winter, Py said.

Instead, price increases are being driven by concerns over Iran, which has threatened to close the Strait of Hormuz along its western coast to oil tankers, choking off a significant portion of the world’s oil shipping, and to cut shipments to Europe. There’s also worry that Israel could bomb Iran’s suspected nuclear weapons development sites, with hard-to-predict consequences for the oil market.

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Brockwell said that if none of those events happen, political and consumer pressure could help cap prices this summer. If high fuel costs also slow the economic recovery, that could decrease global demand and create political pressure on the markets to start bringing prices back down, he said.

“Other than that, I don’t see a lot slowing this market down,” Brockwell said.

Those who spend all day behind the wheel are most likely to feel the pain of those price increases.

“I think it’s starting to get scary right now,” said Mike Bailey, a dispatcher and occasional driver for ASAP Taxi in Portland.

Bailey said gas costs about $35 per 12-hour shift for drivers, who also pay the taxi company $87 a shift to lease the cab they drive. That makes it harder to find enough fares each day to cover costs and still earn a living.

Bailey said the company has six hybrid cars and the drivers who get those “are winning.”

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As for the rest, they have to drive Ford Crown Victorias, with per-gallon mileage in the high teens, compared with around 40 mpg for a hybrid.

Truckers may soon bill for fuel surcharges to help cover the cost of diesel, said Brian Parke, president and chief executive officer of the Maine Motor Transportation Association, which represents those companies in the state. The current statewide average price of diesel is $4.194, according to AAA.

“We’re significantly over (the price of diesel) this time last year,” Parke said.

If the prices continue to rise and truckers have to add that surcharge, he said, manufacturers will add that increased cost to their prices and – you guessed it – the same consumers stressed out by high gas prices will have to pay more for the 80 percent of goods that are shipped by truck.

At the pump, Snow mentioned that her family has already taken steps to limit the impact of high fuel prices on the family budget. The family installed a woodstove in their house, she said, and they cut firewood from farmland they own to keep it fed.

But, Snow added, the farmland is in Bowdoinham.

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“We have to pay for the gas to go 50 miles north to chop the wood for the stove, so we’re still screwed either way,” she said.

 

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at: emurphy@pressherald.com

 


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