Though Prices Are Rising, No Need to Scrap Vacations
Hikes are expected to be fairly moderate and crowds smaller at popular spots, although that may well change. GASOLINE SUPPLY
LOOK for higher prices at the gasoline pump this summer, but not high enough to forgo the trip to Old Faithful or the granite visages of Mount Rushmore. While prices could rise 5 to 10 cents a gallon by August, they will not reach the war-nervy heights of last December nor the oil-shock highs of the late 1970s. They will, however, likely be higher than last summer.
Gasoline stocks remain low and, with the summer driving season approaching, demand for fuel is picking up, edging prices upward. But the recession is likely to keep some families from taking to the road in their Volvos and minivans, moderating increases.
Travel so far this year has been light. For instance:
Visits to Great Smokey Mountains National Park, the most popular site in the park system, are off 3 percent over 1990.
Attendance at Smithsonian Institution museums in Washington, D.C., is down 11 percent.
Disneyland has seen a slight dip in visitations despite a big promotion to lure local tourists.
Sixty-six thousand fewer people have ogled diaphanous Bridalveil Falls and other wonders at Yosemite National Park.
``I don't think the average consumer is going to notice a big difference in gas prices between this summer and last,'' says Sarah Emerson, an analyst at Energy Security Analysis in Washington.
But forces are at work that make it look as though prices could go through the car hood. In recent months, national stocks of gasoline have fallen to their lowest levels in almost 16 years. They are hovering near the minimum level the federal government considers necessary to prevent shortages - around 205 million barrels.
Drops in domestic production and imports are responsible for the low readings on the dipstick.
Among international suppliers, Venezuela cut back deliveries earlier this year because of refinery fires. Brazil, another big exporter, was hampered by strikes. In Europe, a cold winter forced producers to divert stocks to their own use.
United States refiners cut back in part because of altered maintenance schedules. Refineries that normally close for repairs early in the year delayed shutdowns to produce fuel during the Persian Gulf war. When the conflict ended, more than usual switched off pumps.
The low supplies, coupled with the approach of the peak driving season, has caused prices at the pump to rise 2 to 4 cents in the past month. Some analysts predicted they would jump as much as 15 cents a gallon by Memorial Day, but that now seems unlikely.
One reason is that output is slowly rising: Last week US refiners were producing 300,000 more barrels a day than the week before. Imports are edging up, too.
More important is demand. Because of the recession, analysts expect gasoline consumption to be off 1 to 3 percent this summer.
The US Department of Energy projects highway travel will be up 1.3 percent, but, because of greater automobile fuel efficiency, consumption will be down.
``I don't feel too bad about the overall picture this summer,'' says Michael Doyle of Computer Petroleum Corporation, a St. Paul, Minn., firm that tracks gasoline prices.
Predicting summer travel, though, is tricky. While a wheezing economy could cut down on travel, some analysts see forces that will put more people on the road: Many who didn't travel during the war are now planning trips, and lingering fear of terrorism could prompt people to vacation in Maine instead of in Spain.
There are signs of vitality. Some renters of recreational vehicles (RVs) are reporting higher than usual reservations for the summer, and nationwide bookings at Kampgrounds of America, the nation's largest system of private camp sites, are up. Traffic at the Grand Canyon is running 10 percent ahead of a year ago.
``I think we are going to see a lot of people vacationing at home,'' says Peter Beutel, an analyst with Pegasus Econometrics in New Jersey.
The average price for regular unleaded gasoline at self-service pumps is now about $1.14 a gallon - up from $1.08 in early March but far below the $1.39 it peaked at on Dec. 4.
Analysts predict it will edge up to $1.18 to $1.23 a gallon by July 4, with the outlook from there murky.
Last week, explosions damaged two refineries in the United States and one in Saudi Arabia. If too much of this occurs, or if the summer driving does jump, all calculations are off.
``I see a greater risk for the second half of the summer,'' says Robert Boslego of the Boslego Corporation, an oil consulting firm in Winchester, Mass.