Rounds: Gas prices likely will remain high; plans to be made to deter price gouging By Susan Smith The high prices South Dakotans are currently paying to fill their cars with gas could continue until November, Gov. Mike Rounds said Sept. 2.
That would not only increase the cost of day-to-day driving, but also could severely impact the state's corn and bean harvest.
"That's of major concern to us," Rounds said.
By November Rounds expects repairs to the damaged Gulf Coast region would help replenish gas supplies.
On Sept. 1 gas prices were climbing so quickly the AAA Web site was unable to keep up with the increases. Many South Dakota cities saw $3 gas on Sept. 1, while others hovered at $2.69 to $2.79 per gallon.
Cheri Cihak, director of public affairs for AAA in Sioux Falls said prices were jumping 10 to 20 cents at a shot and were likely to keep climbing to as much as $4 per gallon.
Most of the people using AAA to plan trips had made those arrangements in advance so Cihak said she was unsure whether high gas prices had an affect on Labor Day weekend travel. She said more people were concerned about being able to fill up at their destinations.
"We have been getting a lot of calls today from people who are not so concerned about how much gas costs but whether it's going to be available," she said Sept. 1.
She has heard of gas shortages in other states but so far that hasn't happened in South Dakota.
"Even if it hasn't happened I wouldn't be surprised, especially some of our smaller retailers," Cihak said.
Hurricane Katrina and its aftermath have sapped the petroleum supply in the Gulf Coast area and other pipelines have sent their product south to help clean-up efforts, said Dawna Leitzke of the South Dakota Petroleum Marketers Association. Some gas station owners are trucking gasoline at their own expense to help southern states, she said.
South Dakota gets its petroleum from pipelines in Oklahoma so its gas supply wasn't directly affected by the hurricane. But because of the shortages caused by the storm other pipelines are trying to shift their loads to southern states whose supplies are tapped out. That lowering of the supply overall could affect gas supplies in South Dakota, she said.
But Leitzke said it's not likely South Dakota will run out of gas.
"We are not in a situation where we're going to run out of fuel in South Dakota. People shouldn't panic," she said.
Leitzke represents gas stations and wholesalers who are paying more for their product right along with consumers. What's traded on the New York Stock Exchange is being immediately reflected in the wholesale price, Leitzke said. And that wholesale price is increasing much more dramatically than in the past. Instead of a two-cent daily increase that price could increase 20 cents, she said.
Some customers have taken out their frustrations directly at gas station attendants, she said, who are only trying to do their job.
"The bottom line is this is not the fault of your local marketer or your local cashier," she said. "It's just one of those situations we are facing as a nation. Everybody needs to practice a little patience and a little understanding and not lose patience with the marketers."
On Sept. 2 Gov. Mike Rounds announced he was lifting safety requirements for truckers hauling gasoline in South Dakota.
Those regulations limit how long a driver can haul product without taking a break, said Captain Pat Fahey, commander of motor carrier services for the South Dakota Highway Patrol. Federal regulations also were relaxed. Because of the supply shortages, truckers hauling gas to South Dakota merchants may wait longer in line for that gasoline than normal, which counts towards their hours of service.
"If there is a slowdown in the delivery of product I don't want to compound that possible slowdown of the product into our terminals by slowing down the delivery to our terminals because of a time on the job restriction," Rounds said.
However, an executive order issued by Rounds Sept. 2 mandated that employers give a break in driving to truckers who indicate they need one.
Permit fees also have been waived for truckers directly involved in the southern relief efforts, Fahey said. Typically drivers have to be permitted to haul fuel in South Dakota or buy a temporary permit to get through the state. They'll still have to apply for the permit, but they won't have to pay, Fahey said. Permit fees for overweight and oversized vehicles also will be waived for those hauling supplies and equipment for hurricane relief, he said. Fahey said the motor carriers would make sure those
truckers are traveling roads that can structurally accommodate the load they're hauling.
"We're just looking at a way to try to do our part in this part of the country by conserving gas and oil and if we do need to help the carriers transport that product to customers in South Dakota we want to be able to do that," Fahey said.
Rounds said he's heard talk about price gouging and planned to meet with Attorney General Larry Long Sept. 2 to discuss legal action the state might take if that situation became a reality. He said he understands why people might suspect price gouging. Many times suppliers are getting changes in gas price six times per day instead of once a day in the past.
If they get more than one transport a day they could get more than one price increase, he said. He and Long planned to define a course of action to "discourage price gouging in South Dakota."
"We will pursue legal activity where it is doable," Rounds said. "We are limited because it's hard to prove price gouging."