No Relief In Sight For Gas Prices

Rim Country businesses face increased costs

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Record crude oil prices are keeping gasoline above the $3 per-gallon mark and experts say to expect the trend to continue.

Despite what is being called "healthy" supplies by the U.S. Department of Energy, crude oil continues trading at more than $100 per barrel and prices at the pump keep rising.

On April 9 crude oil traded at an all-time record of $112.21 per barrel.

AAA Arizona announced on April 9 that the average price per-gallon for regular unleaded was an all-time Arizona record of $3.29 statewide, three pennies more than last week.

At this same time last year, $2.88 was the average price for a gallon of regular unleaded in Arizona.

Nationwide, $3.35 is the current average for gallon of regular unleaded.

The average price per-gallon for regular unleaded in Payson is about $3.30.

"Unfortunately for motorists, it does not appear that there is much relief in sight, at least for the short-term," said Linda Gorman, public affairs manager for AAA Arizona. "In fact, the current market indicates that prices will continue to inch toward the $3.50 per gallon mark between now and Memorial Day."

AAA said that despite the healthy increase in crude oil supplies, coupled by a decrease in gasoline supplies, prices are expected to near the $4 mark before years end.

Government experts have also reported a drop in demand for gasoline, said Linda Gorman, public affairs manager for AAA Arizona.

"What we are seeing now is a disconnect between market forces and prices," she said.

"This further illustrates that the market is being driven by external forces as opposed to demand for gasoline," said Gorman.

She said that normally oil and gasoline prices are driven by a market economy that fluctuates depending on supply and demand.

"Normally in (Payson) we see the lowest gasoline prices of the year between November and February because we aren't using boutique blends and hurricane season is not a factor, things like that, but for the first time we didn't see that this year," Gorman said.

She said the continued record prices are in large part due to investors flooding the oil market.

"They see this (buying oil stocks and interest in oil companies) as a safe investment, and when investors flood the market, it drives the price of oil up," Gorman said.

"Quite honestly, they're making a lot of money off of it," she added.

What does this mean for Payson and the Rim Country?

Well, according to Aaron Smith with CNNmoney.com it means higher food prices for one thing.

Smith said his research indicates things like milk, poultry, beef and cereals are on the rise.

"The price of milk is the biggest culprit, with a staggering increase of 23.2 percent through November. And with basic foods like dairy and wheat driving up the cost of other groceries, almost everyone is feeling the squeeze," Smith said.

The local Bashas' grocery store has felt the crunch of gas prices.

Manager Bob Mykleby said that because corn is being used more and more in the production of ethanol, it has caused food prices to climb.

"Oh yeah, it's driving up prices across the board," Mykleby said.

"I can't say off the top of my head where those specific increases are, but there have been (price increases) throughout the store."

Owner of Payson Concrete, George Randall, said he has felt the impact of higher than expected gasoline prices.

"Oh yes, it's going to affect any business. We have definitely felt it in increased costs of some of the oil-based products like the asphalt we use," Randall said.

He said that so far he hasn't increased his customer prices, but is unsure if he will in the future if gasoline continues to rise.

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