Soaring gas prices have the wallets – and patience – of motorists running on empty recently in a daily effort to fill their fuel guzzling tanks.
Soaring gas prices have the wallets – and patience – of motorists running on empty recently in a daily effort to fill their fuel guzzling tanks.
This week, gas prices nationwide reached an all-time average high for spring at $3.96 per gallon. The current average for a gallon of gas in Illinois is $4.22 and climbing. Just one year ago the average price in the city was $3.11.
In Chicago and the surrounding areas, motorists are shelling out as much as $1 more per gallon than that national average.
“It is terrible,” an exasperated Pamela Plummer said about the price of the gas she bought at an Englewood-area Citgo. A gallon of regular unleaded gasoline was $4.49 at 67th and State Streets. “It’s just too high right now.”
Had Plummer gassed up downtown, she could have paid at least 30 cents more per gallon. At Defender press time, gas prices at Taylor Street and Des Plaines Avenue was $4.79 for regular, premium was a penny shy of $5 per gallon.
Nationally, the average price is $3.92 a gallon, an increase of more than 30 cents a month ago, according to GasBuddy.com.
Experts say gas prices are skyrocketing due to a number of factors such as refining capacity, the cost of crude oil, international demand for oil and unrest in the Middle East.
“We started to notice a climb in gas prices when the conflict in Libya began,” said AAA spokesperson Nick Jarmusz.
However, Dave Sykuta, director of the Illinois Petroleum Council, says local taxes and the value of U.S. currency also play a role in why Chicagoans pay more for gas than any other major city in the country.
Motorists in Illinois pay a federal excise tax of 18 cents a gallon for gasoline along with 19 cents in state taxes. That is concurrent with a 5-cent city tax and a 6-cents per gallon tax in Cook County.
Revenue generated from the fuel tax is placed into the city’s $66 million budget Motor Fuel Tax Fund. Those dollars are allocated to the Department of Transit, Department of Streets and Sanitation and for bridge and road maintenance, according to the city’s Office of Budget and Management spokesman Pete Scales.
“The city is hurting itself with these taxes,” he said. “Much of the price pain in Chicago is self inflicted. Taxes are clearly pushing gas prices.”
Small businesses are feeling the impact too.
"It is terrible out there," said Fay’s Flower Affayre owner Fay Morris. "The economy and gas prices are something else."
Morris, who has been at her 6423 S. Cottage Grove location for 30 years, told the Defender that delivery drivers are spending an extra $70 a week on gasoline. As a result her business has had to increase its delivery charge by $3 to make up for the cost of gas.
"It’s hurting our business," said Morris. "Hopefully the gas prices will go down and the economy will improve."
And just up the street from Morris, Anthony Oliver, owner of Alexander Movers at 6535 S. Cottage Grove, is facing a similar predicament in dealing with the rising cost of fuel.
"Gas prices have increased by 35 percent from last year, and it has impacted our profit margin," Oliver said. "We are spending between $1,500 and $2,000 a week on gasoline. Because we buy diesel, it is even more expensive for us."
Oliver said he has elected not to increase moving prices for customers, instead choosing a smaller profit margin.
"It is a tough rope to walk," he said.
Analysts offer a long-term explanation for the recent surge in gas prices.
Sykuta, who has studied the oil and energy industry for nearly four decades, explained the value of the dollar has fallen close to 60 percent in the last three years, which has contributed to the price of oil increasing to $113 a barrel as April concluded.
“No matter where you go, oil has to be bought in dollars,” said Sykuta. “When the value of the dollar drops, then the price of the oil raises.”
As a result commuters like Plummer are forced to seek alternatives to save a few extra pennies at the pump.
“If I have to go to Indiana and buy gas, that is what I might have to do,” the downtown Four Seasons Hotel valet said. “Right now I spend an extra $20 on gas, and it cuts into my other expenses like buying groceries and paying bills.”
South Side resident, and mother of two, Dameka Edwards, can relate to the plight of many motorists who now dread filling up.
“It takes $61 to fill my Pontiac Grand Prix,” Edwards said. “It would be more if I bought premium gas because it’s a high performance car.”
“I drive five days a week to my job in Matteson, and it is crazy that (gas prices) have to be that way,” she said. “It affects everything. It affects the payment of my utilities, child care…everything.”
Edwards, like many, also lamented about gas prices in some areas of the city being vastly different than others.
At Citgo on the city’s West Side, 4402 W. Roosevelt Road, regular gas at Defender press time was $4.59, at least 20 cents per gallon cheaper than downtown. But the Roosevelt Road price was 15 cents more than suburban areas such as nearby Broadview where gas was $4.49 and in southwest suburban Evergreen Park where it was $4.45 per gallon.
Analysts say prices in urban areas tend to be higher due to real estate, operating costs and taxes often are more expensive than suburban areas.
“Gas dealers set the price,” Sykuta said. “However, it is not regulated.”
While the prices are not regulated, dealers can’t realistically drive up the price too much as it will result in a loss of customers and profits to competitors.
“Every consumer knows what the price of gas is,” he said. “People will drive around and try to find the cheapest gas. So it does not benefit stations if the price is too high.”
Copyright 2011 Chicago Defender
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