Thursday, April 25, 1996 | 11:59 a.m.
Local consumers are fuming over gasoline prices that have jumped 15 to 17 cents a gallon since Feb. 1.
Gas prices are at their highest level since the start of the Persian Gulf War in 1991 and Jack Greco, chairman of the Nevada Gasoline Retailers Association and operator of a local Arco station, said the increases may not have topped off.
Prices took another 3-cent-a-gallon increase this week, with regular unleaded hitting $1.40 a gallon and super unleaded surpassing $1.60.
Greco said he fears Southern Nevada motorists are paying for California's reformulated gasoline that they aren't even receiving.
New tougher California environmental requirements take effect June 1, requiring drivers in that state to begin using a cleaner, reformulated gasoline that gives off fewer hydrocarbons and lower levels of other pollutants such as carbon monoxide, nitrogen oxide and sulphur dioxide. West Coast refineries have already started making the more expensive variety, Greco said.
"It's greed, not need on the part of the oil companies," Greco said. "When the price goes up, they (the wholesalers) have myriad public relations statements to defend their increases. Consumers -- they're very irritated and all we can tell them is that it's not the retailers that have their hands in the cookie jar."
Nevadans aren't paying directly for the higher cost of California's gasoline, but they are paying indirectly for it, said Jim Hendon, spokesman for Chevron Corp., the gasoline wholesaler headquartered in San Francisco.
Because refineries now have to make one batch of gasoline for California and a different batch for other Western states that aren't requiring the reformulated mix, companies can no longer take advantage of economies of scale, he said.
Among the reasons for the higher prices cited by Hendon and other petroleum industry officials:
* Crude oil prices are up $5 to $7 a barrel, which translates into an increase of 16 to 17 cents a gallon at the pump.
* Europe and North America had harsh winters, increasing the demand for heating oil. Big refiners, reacting to steady business, used their crude to make heating fuel instead of gasoline.
* When spring finally arrived, gasoline inventories were at a 20-year low, but drivers were suffering cabin fever and were eager to get on the road again. Demand was high and supply was low. Economics kicked in.
* Oil companies let crude inventories shrink, thinking Iraq would submit to U.N. human rights demands and thus be allowed to begin selling 700,000 barrels of oil daily on the world market. The additional supply would have brought prices down. But on Monday, Iraq accused Great Britain and the United States of scuttling the U.N. settlement and prices climbed.
* Speed-limit increases to 65 mph in most states have increased consumption. Experts say that will increase crude oil demand by more than 2 percent and could mean about 2.5 million more gallons of gas burned daily on U.S. highways.
* Some refineries and pipelines have had freak calamities that further cut production: a fire at Shell in California, a flood at Olympic in Oregon, a complete shutdown at a small gasoline producer in Louisiana.
* The national economy is generally healthy, meaning people have money to travel and more trucks are delivering more goods to more factories, using more gas.
Petroleum industry officials say it was a freakish occurrence that these events coincided.
"Use of gasoline always increases when the economy is good," said Joseph Lastelic, a spokesman for the American Petroleum Institute in Washington. "When crude goes up, everything goes up. The diesel people, truckers and farmers are screaming."
SUN WIRE SERVICES contributed to this report.
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