Las Vegas gasoline prices rise again

While gasoline prices in the Midwest have fallen more than 17 cents over the past two weeks, the price of fuel in Las Vegas and the rest of the West is once again hitting motorists in their wallets.

In June the average price of a gallon of gasoline in Las Vegas was $1.63, and so far in July the price has jumped to around $1.72 a gallon, according to AAA statistics. In Northern California the price jumped 17 cents at the same time, prompting speculation that the West is paying for the sudden drop in prices in the Midwest.

But AAA spokeswoman Bronwyn Hogan says it's more likely that motorists are simply seeing a return to normal in Western gasoline prices after an unexpected price drop last month.

"The drop in prices in June really did come as a surprise," Hogan said. "The highest gas prices in the country are in the West, and that drop makes it seem like we're making a huge jump when we're really just returning to normal."

The fluctuations in the average cost of gasoline in Las Vegas over the last four months would seem to back up Hogan's point.

The average price of a gallon of regular unleaded gasoline in Las Vegas during the months of March, April, May and July was about $1.75, with June's $1.63 average standing out as the aberration.

"The whole market is based on speculation, and in June the speculation was that there was going to be an increase in production with OPEC shooting for a price of $25 a barrel," Hogan said. "Production has increased, but I think the barrel price is still around $30, so we're seeing it go back up."

While prices have increased in Las Vegas they still have not reached April's average of $1.80 a gallon. They also don't match the prices other motorists are having to pay throughout the West. In Reno the average gasoline price is $1.81, and in San Francisco people are paying about $1.97 a gallon.

Midwesterners are now enjoying substantially lower prices at the pump, after seeing gasoline skyrocket to over $2 a gallon in cities like Chicago last month. Gas has dropped nearly 55 cents in Chicago to about $1.61 a gallon.

While dropping prices in the Midwest and higher prices in the West may seem more than coincidental to motorists, analysts say there is a reason why prices are coming down in the Midwest.

"There were some distribution problems when the stations switched over to a cleaner burning fuel," Hogan said. "The supply level of the new gas wasn't where it needed to be."

Jack Greco, a local service station operator and director of the Nevada Gasoline Retailers Association, says that the West Coast experienced similar high prices when it first switched to cleaner fuel.

"What you saw was gas companies taking advantage of the uncertainty caused by the introduction of reformulated gas into that area," Greco said. "The same thing happened here when that gas was introduced, but the companies really took the opportunity to go hog wild on the Midwest."

As the peak travel season of summer comes to an end, Hogan says she expects to see gasoline prices slowly decline, but Greco says that relief may not be in sight.

"Any drop consumers are seeing now, or in the past few weeks, is because we've had some infighting between dealers of the same brands of oil in town as they compete for customers," Greco said. "Some of the oil companies have been ignoring the retailers for several weeks, and that can drive competition.

"We always hope there will be a little relief after the summer, but we're dealing with a very tight market right now."

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