Local gas prices hits $4 gallon

Gas prices at some local gas stations broke the $4-per-gallon mark over the Memorial Day weekend, hitting $4.099 in the Dagsboro and Millsboro areas on May 22, $4.029 in the Millville area on May 26 and $4.059 near Frankford on May 27.

Statewide, according to AAA Mid-Atlantic, the number of stations charging $4 or more for a gallon of regular unleaded gasoline jumped this week, from none on May 21 to two on May 22, four on May 23, 11 on May 26 and 15 as of May 28. Many of those stations were located in the Wilmington area, while the other cluster was at the beaches.

AAA Mid-Atlantic had predicted less travel over the 2008 Memorial Day weekend, due largely to the growing cost of fuel, with local and regional destinations, such as the beaches, seeing much of the anticipated holiday travel.

That appeared to be borne out locally, with heavy traffic seen on the roadways over the weekend.

“There were a lot of people around. The weather was good, which I think sets the tone for a good season,” said Karen McGrath, executive director of the Bethany-Fenwick Area Chamber of Commerce. “Whether you’re a businessperson or a vacationer, there was smile on your face.”

Over at Ocean Side Subs & Pizza in Fenwick Island, Sue and the Clower clan saw a bounty of customers.

“Oh, we sure did,” she said. “We were very busy. Numbers for one of the days were up over last year. We were very pleased with the weekend.”

McGrath said she suspected many people may have waited until the last minute to decide whether or not to head to the beach for the holiday weekend, wanting to see what the weather would be like before heading out. On Friday afternoon, she said, the Holiday Inn Express in Bethany Beach was not quite at 100 percent for that night.

But traffic on local roads throughout the area and in some local stores appeared to suggest that many had opted for less of a drive, heading to the beach instead of farther afield, as AAA had predicted with expectations of the impact of rising gas prices.

Gasoline and crude oil prices continued to break records again this week, with crude traded as high as $135 per barrel, and the national gas average was up 9 cents over the previous week. Seven states saw the average for regular unleaded cross the $4 threshold.

After the Memorial Day weekend, AAA Mid-Atlantic predicted, the national average for unleaded regular gas (and therefore, many more individual state averages) could also cross the $4 milestone.

“This weekend will tell us a good deal about how Americans are reacting to the prospect of $4 gasoline and give us a good idea of what demand will look like for the rest of the summer,” said Catherine L. Rossi, manager, Public and Government Affairs, AAA Mid-Atlantic, on Monday morning. “The Memorial Day weekend is to convenience stores who sell gasoline what ‘Black Friday’ is to shopping mall-based retailers. It is typically a big-volume weekend that sets the pace for sales for the rest of the season.”

According to Rossi, concerns about declining U.S. oil supplies and increasing global demand will likely keep crude oil prices, the driving force behind gas prices, high in the days and weeks ahead.

Some analysts say crude has also been boosted in recent days by especially strong demand for diesel in China following last week’s earthquake, Rossi said. Although there are some signs crude oil prices may decrease with increased strength of the U.S. dollar late last week, she noted, crude is unlikely to see any significant decline near term.

“Market forces should act to bring down crude oil prices at some point — the question is — when?”