Pain in the pump

Foreign supply of crude oil, the summer travelling season and a lack of emergency reserves have driven gasoline prices to record highs, with no sign of relief in the future. \nThe supply and demand governing the free market is cited as the reason behind the recent high and fluctuating gas prices, according to two officials within the Indiana government. The lowest price per gallon this weekend in the state was $1.66 according to www.IndyGasPrices.com, a Web site for gasoline prices in Indiana. The Shell stations held the highest priced gasoline, $1.91 per gallon, and the average of the state wavers around $1.83. \nIn December 2002, the Indiana Petroleum and Convenience Store Association issued a decal for gasoline distributors to display at the pump in order to quell consumer complaints. According to the IPCA's Web site, when the price consumers pay at the pump is broken down into its profiteers, the companies which distribute and refine the oil necessary to formulate gasoline receive the largest sum of money. The rest of the money divides into the storage, taxes and the distribution of gas, the decal illustrates.\nMaggie McShane, the executive director for the Indiana Petroleum Council, said the gas prices are contingent upon the price of crude oil, which is at a record high of approximately $37 per barrel. \n"The supply of crude oil steadily decreases each year," she said, adding that the economy boom in Asia has demanded a significant increase in crude oil.\nAccording to the Bureau of Transportation Statistics for 2004, the United States imports 60 percent of its oil. The OPEC Web site said the headquarters is currently located in Baghdad, Iraq; it has been located in Switzerland and Austria in past years. The BTS documents, of the top ten crude and refined oil suppliers, six of them belong to OPEC. According to the OPEC Web site, the 11 nations who belong to the organization work together to set exporting barrel prices in order to keep competitive and consistent within market fluctuations.\nIndiana has two oil refineries, one of which, according to www.eia.com, is one of the largest in the country. The Midwest consumes 1/3 of the country's gasoline supply and accounts for 40 percent of the country's refining capacity. However, most of the gasoline comes to the Midwest via pipelines from Gulf Coast, according to www.ipca.org, and takes up to two weeks to flow from start to destination. McShane said gasoline prices are dependent on the pipeline travel time, as the price increases with the time it takes the gasoline to arrive in Indiana because the emergency reserves are limited. \nThe gas tax for Indiana is currently at 18 cents per gallon, which has not changed from the 2003 tax. According to Ross Hooten, the senior staff attorney for the Legislative Services Agencies in Indiana, the government has kept gasoline taxes in proportion to overall cost.\nHooten drafts many of the tax bills which circulate Indiana's legislature, and one of the newest bills calls for a change from the cent-per-gallon tax to a cent-per-mile tax. \nHouse Bill number 1811 states this proposal attempts to capture the tax revenue lost because of more fuel efficient vehicles. Until a more widespread alternative is available to gasoline, taxes will continue to be a burden to the consumer, the bill says.\nMcShane is quoted in an article on www.nuvo.com saying, "technology has allowed us to reach reserves that in the past were impossible for us to imagine we could access ... consumers will drive the decision, and, as renewable-energy sources become cheaper, they will begin to compete more with fossil fuels."\nIn a report for the Economic Analysis of Alternative Indiana State Legislature on Biodiesel, the domestic, renewable fuel could be used in almost every public transportation vehicle, thus significantly reducing overall pollution. Biodiesel is a diesel mixture of fat and grease from animals and plants and the standard processed petroleum product which could cost anywhere from 0.186 cents more per gallon or up to 25 cents per gallon, depending on the mixture.\n-- Contact staff writer Allison Ricket at aricket@indiana.edu.