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Alaska gas hits record prices

Jump not expected to have much impact on weekend traffic

Posted: Sunday, September 04, 2005


  Gabe Haunold fills up at a Tesoro station in North Kenai Saturday afternoon. He said higher gas prices had not made much difference in the amount of driving his family was doing. Photo by M. Scott Moon

Gabe Haunold fills up at a Tesoro station in North Kenai Saturday afternoon. He said higher gas prices had not made much difference in the amount of driving his family was doing.

Photo by M. Scott Moon

As average Alaska gasoline prices soared to record highs Friday in the wake of Hurricane Katrina, motorists were urged to reduce their gasoline consumption until the gasoline supply network can recover, according to a press release issued Friday by AAA MountainWest.

Even before the hurricane gasoline prices had been rising throughout the summer. Despite the increase in gas prices, AAA had expected auto travel to be on par with last year's labor day, said AAA spokeswoman Denice Harris.

"Now, it's hard to tell what's going to happen," Harris said, referring to the hurricane.

The average price of self-serve regular gasoline in Alaska on Friday was the highest ever at $2.656, according to the press release. Last month, the average was $2.386 and a year ago the price was $2.106, according the the press release.

The average price Friday was $2.70 per gallon in Kenai and $2.71 in Soldotna, according to AAA.

Eight refineries were shut down due to Katrina, half of them producing gasoline, according to AAA.

Labor Day weekend marks the end of an eventful and surprisingly strong summer travel season, AAA noted. Despite high gas prices all summer, the Alaska Travel Industry Association said it has not affected travel to Alaska.

"Alaska is on people's lists," said Dave Worrell, communications director for ATIA.

Worrell said many people who travel to the state are fulfilling a dream and a couple cent rise in gasoline prices will not affect their plans.

Plus, he said most people plan trips 12 to 18 months in advance. The affects of high prices may not be seen until next year, he said. He added that people traveling next year may react to current gasoline prices.

Shanon Hamrick, executive director of the Kenai Peninsula Tourism and Marketing Council, said she did not think high gas prices would have a big impact on weekend travel to the Kenai Peninsula.

"The phone was ringing off the hook (Thursday) from people coming down from Anchorage — and the fishing is hot," Hamrick said.

However, in the short term, AAA said there is an imbalance in supply and demand for gasoline in parts of the United States due to refinery and pipeline outages caused by the hurricane. This has reduced the supply of gasoline, according to Friday's press release.

Harris, of AAA, said Alaska is not immune to supply concerns.

Crude oil and gasoline produced in Alaska go to suppliers around the nation and outside gasoline comes into the state, she said. Prices and supply are driven by the national market, Harris said.

"Just because the gas is refined in Alaska does not mean the gas station across the street has gas from that refinery," Harris said.

San Antonio-based Tesoro Corp. owns a refinery in North Kenai. The refinery is not strained and is running at planned levels, said Kip Knudson, external affairs manager for Tesoro Alaska.

"The hurricane hasn't really changed anything for us," he said.

Knudson said "small am-ounts" of gasoline are shipped out of the state this time of year but would not specify how much.

Gross sales for Tesoro's North Kenai refinery topped $1 billion in 2004 with profits at about $85.8 million, according to a Kenai Peninsula Borough assessment of the refinery.


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