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CAPE GIRARDEAU, Mo. -- With the New York Mercantile Exchange reporting crude oil trading less than $100 per barrel and wholesale gasoline selling at $2.45, motorists in South Missouri have reason to be confused as to why they are paying nearly $5 a gallon for gas.
Ron Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association, told the Southeast Missourian the price retailers paid on Wednesday for the wholesale price of gasoline is what will be delivered to their stores at a later date.
Under normal conditions, retailers would combine the wholesale price of gasoline they paid for at an earlier date with other costs, such as 50 cents’ worth of Missouri state and federal taxes, freight costs and credit card fees. Jowever, additional factors have skewed the system, the report stated.
"We’re not in a normal situation," Leone told the paper. "We have refineries which are offline at the moment, which are forcing retailers to raise their prices. But I expect within a week or two we’ll begin a return to normal."
While Hurricane Ike missed the largest concentration of oil and gas refineries in the Gulf, roughly 14 refineries in Texas were shut preceding the storm bringing 20 percent of the nation’s refineries offline.
East Missouri realized gas spikes because it receives most of its gas from a pipeline based in the Gulf of Mexico whereas west and central Missouri receive gas from a pipeline from Western states such as Oklahoma and Nebraska, Leone told the paper. As result, he said c-store owners are in a pickle.
"Do they increase the retail price of gasoline to the point where it generates enough income so they could survive if they were to run out of gas for a day or two?" he continued. "Or do they keep prices about the same and then if they run out of fuel, they cannot purchase any additional gasoline to offer for sale to the public? Either way, they’ll face criticism."
As retailers wait for the market to stabilize, Missouri Attorney General Jay Nixon’s office is investigating approximately 200 alleged cases of price gouging in the state.