Gas price patience running on empty?

The expression on Willmon Simpson's face gave a hint of what he was thinking. He had just finished pumping $40 worth of gas - not a lot of fuel considering the price per gallon.

Gas prices in the Shoals have risen almost 20 cents during the past week to more than $3.65 per gallon.

"This hurts bad; it really does," said Simpson, a Tuscumbia resident.

Motorists throughout the Shoals and elsewhere feel his pain.

"Something has got to be done about these prices," Simpson added. "If we would all stop driving for just one day, maybe it would bring the prices down. It would let the oil companies know we don't like these high prices."

Clay Ingram, spokesman for AAA-Alabama, said high prices have already caused many Americans to drive less. He said had drivers not cut back, gasoline prices would be even higher.

"Our high point for gas prices in Alabama last year was $3.08 a gallon during Memorial Day weekend," he said. "At that time, crude oil was right at $60 per barrel. Now crude oil is trading for around $120 per barrel and gas is selling for around $3.50 per gallon. The price of crude oil has doubled but gas prices have only gone up about 45 cents a gallon.

"There's evidently a rather large profit cushion built into the price of gasoline," he said.

The anger Simpson and other motorists feel while filling their tanks is often followed by frustration and a sense of helplessness because they don't know how to cope or whom to blame. Many wonder exactly who's making all the money at the expense of motorists.

Laurie Falter, an oil industry economist for the U.S. Department of Energy's Energy Information Administration, said the price of crude oil is the primary factor in the cost of a gallon of gasoline.

While motorists complain about the price of gasoline, refiners are complaining about the price of crude oil.

In 2005, when gasoline was selling for $2.27 per gallon, the cost of crude oil represented 53 percent of that price, according to Falter's division. The price refiners pay for crude oil now accounts for about 75 percent of the price.

Falter said crude oil prices will likely remain high for much of this year. "Unfortunately there is nothing that suggests oil prices will go down drastically anytime soon."

Peter Clark, an associate professor of chemical and biological engineering at the University of Alabama, said rising crude oil prices have reduced the profit refiners reap from the production of gasoline and other petroleum products.

"The refiners' margin has been squeezed tremendously. Exxon didn't make as much money last quarter as it had been making," Clark said. "When oil prices go up, the companies make more on oil and less on refining."

With diesel selling for more than $4 per gallon, it's costing oil companies more to transport gasoline and other fuels to their customers, he said.

"To me, it's amazing they are able to sell gas for $3.50 per gallon with all the costs involved in producing it and getting it to the customer," Clark said.

Mike Hubka, of Tuscumbia, scoffs at the notion oil companies are being squeezed by the high price of crude.

"Ain't that a shame," Hubka quipped while getting gas for his pickup. "When the oil companies keep paying out those enormous bonuses to their presidents, it makes you wonder about their complaints about profits being down."

Clark contends oil companies shouldn't be criticized for driving up the price of crude.

"The price of oil is out of the oil companies' control," he said. "Exxon doesn't set the price of oil. It's set on the world market."

Rogersville resident, Nancy Stephenson, doesn't buy the argument.

"I read over the weekend that ExxonMobil made over $10 billion during the first quarter, so don't expect me to feel sorry for them," she said. "How can they and other oil companies make that kind of money and tell me it ain't their fault?"

Clark said the United States uses more oil than it produces and is at the mercy of the global petroleum market.

The Energy Information Administration reports that 60 percent of the oil used in the U.S. comes from other countries - 17.2 percent coming from Canada, 12.4 percent from Mexico, 10.7 from Saudi Arabia, 10.4 percent from Venezuela and 8.1 percent from Nigeria.

Increased demand for gasoline in China and India is also playing a role in the increased price of oil, Clark said. "You have people driving today who have never owned a car before."

He said the weak U.S. dollar is also helping drive up oil prices. While the U.S. economy is struggling, that of oil-producing countries is thriving, which reduces the buying power of the dollar.

Clark said the best way for motorists to combat the high prices is to drive less.

"If we would cut back just 5 percent on our driving, it would save a million barrels of oil per day," Clark said. "That wouldn't be hard to do. We're only talking about 5 miles out of 100. That's one less trip to the store during the week."

Ingram agrees that if all motorists would conserve fuel, it could cause gas prices to fall.

Falter said conservation efforts by motorists in recent weeks have created a surplus of gasoline in the United States, which has helped hold down prices at the pump.

Some analysts expect the summer travel season will increase demand and warn gas prices are likely to reach $3.75 per gallon by Labor Day.

Ingram said the best way to prevent those warnings from materializing is for motorists to continue conserving fuel.

"It's all about supply and demand," he said. "If the demand is low, gasoline is going to cost less. If demand goes up, so will the price."

Clark said calls by some elected officials to temporarily eliminate gas taxes as a way to bring down fuel prices are off base. "That would be silly."

Critics contend eliminating the taxes, which are used to build and maintain highways, would do little to bring down the price of gasoline and diesel. At the same time, it would have a negative impact on highways and roads.

Clark said removing gasoline taxes would also encourage motorists to use more gasoline, which would increase demand and drive up prices. "What you want to do right now is discourage use. You don't want to encourage it."

Ingram said many investors are gambling that more Americans will hit the road this summer and are bidding up the price of oil in anticipation of a busy travel season.

"The speculators are buying up the futures hoping that we will travel more and pump up the demand for gas," Ingram said. "But if everyone will make a concerted effort to conserve gas and we wind up with a glut of oil on the market, those investors are going to start selling their oil futures and the price will start snowballing downward."

Dennis Sherer can be reached at 740-5746 or dennis.sherer@timesdaily.com.