Gas prices skyrocket following invasion of Kuwait

By NENA BAKER United Press International

Gasoline prices were up as much as 14 cents a gallon Friday -- prompting cries of price-gouging -- as station operators passed on to motorists sharp hikes in wholesale costs following Iraq's invasion of Kuwait.

Nationwide, self-serve unleaded gasoline was averaging $1.115 a gallon -- a rise of 4 cents in two days, according to a spot check of 1,400 gas stations conducted by the American Automobile Association.


Retail price increases ranged from four cents to 14 cents a gallon and further hikes were expected this weekend, AAA said.

Alarmed by reports of sudden hikes in gasoline prices, Texas Attorney General Jim Mattox established a special task force to investigate and prosecute price-gouging in his state.

'I began receiving calls (Thursday) night at my home from people who are angry and suspicious about sudden hikes in gasoline prices,' Mattox said. 'In one day's time, there is no way that Iraq's invasion should translate into higher prices at the pump.'


Citizen Action, a Washington consumer group, said gas prices would rise a total of 15 cents to 20 cents a gallon over the next few weeks.

The United States gets less than 5 percent of its crude oil from Iraq and Kuwait -- and currently has a three-to-four month oil reserve -- but spot oil prices have skyrocketed as world markets fear a crisis in the Middle East may threaten supplies.

Gas stations typically pass on the entire amount of wholesale gas price increases to consumers.

Higher prices sparked numerous outcries from industry and consumer groups who claim oil companies should not charge higher prices for gasoline that is already in tanks, ready to be pumped.

The head of the Illinois Gas Dealers Association, Robert Jacobson, said it should take at least 10 days for any wholesale price increase to be felt at the pump.

Major U.S. oil companies have 'aided and abetted' OPEC in raising the price of a barrel of oil in their own 'self-interest,' he said.

Norm Sather, president of the Washington Oil Marketer's Association, said hiking prices immediately isn't based on reality since there is so much gas in storage.


'I think prices are increasing because oil companies see an opportunity to make additional profits.'

Don Herring, a spokesman for Pittsburgh-based Marathon Oil Co., which raised its wholesale prices 8 cents a gallon Friday, said market conditions dictate the company's prices.

'Prices go up and prices go down and it isn't always related to the cost of material you bought last month,' he said.

Motor club AAA urged the public to 'not succumb to panic buying in an effort to avoid perceived future price hikes.'

In California, where prices at the pump rose 5 cents a gallon earlier this week when a voter-approved hike in the gasoline tax went into effect, the latest wave of increases was especially hard felt.

In Florida, some gas stations were raising prices even though their suppliers had not yet begun charging them more, a spokesman for AAA charged.

'They're collecting an increase that they haven't yet suffered. ... I'm sure some people might call it gouging,' said William Dodd.

But in Pontiac, Ill., two radio stations celebrated their 25th anniversary by selling gas for 65 cents a gallon -- or at 1965 prices -- in an event planned a month ago.


'If we had had time, we could have had Arab outfits made up,' said WPOK-WJEZ General Manager Kevin Anfield.

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