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CNN Saturday Morning News
Interview With Mantill Williams
Aired August 30, 2003 - 09:20 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Well, the highways will be crowded this weekend. According to AAA, more than 33 million people, in fact, will be traveling far away from home. That's the highest number since 1995. And more than 28 million will be taking their trip in the family vehicle, family truckster.
But travel by car this holiday weekend can be a budget buster. Check out these prices now in Boston. And they are worse on the West Coast. Nationwide, gas prices took one of the biggest two-week jumps in history.
Gas prices are on a roller coaster this year. In March, we saw a big spike just before the war in Iraq. Then it cooled off a bit before hitting a record high this week of a whopping $1.75 on average for a gallon of unleaded gas.
Why this big hike, and when will it end? Let's get some feedback from Mantill Williams. He's a spokesman for AAA and the American automobile Association, as we know them.
Thanks so much for being with us.
MANTILL WILLIAMS, AMERICAN AUTOMOBILE ASSOCIATION: Thank you. Good morning.
COLLINS: (UNINTELLIGIBLE) we appreciate it.
WILLIAMS: Thank you.
COLLINS: Why is gas so expensive right now?
WILLIAMS: I think it's a number of factors. But probably the three main reasons is, number one, inventories. Right now, we haven't built a refinery capacity in the last 25 years.
And then secondly, usage. Gas usage was actually at its highest between mid-July and between July and up to now. And what we're finding is that we had, we were using 9.4 million barrels of gasoline per day.
And then third, we had a number of disruptions in the system. The blackout, that actually drew down supply, because it took awhile for some refineries to get back online. And then also in Arizona, we actually have a pipeline go down. And we had a few other refinery outages across the country. So keep in mind, we have a system now where there's very little room for error. So if just one thing goes wrong, then these prices are going to jump up somewhat. But we had a number of things go wrong, so that's why we're seeing these big price spikes.
COLLINS: But you know what? It's interesting, in thinking about how expensive gas is, that we're going to have a record year as far as people hopping in their cars, filling up with gas, and then driving away for the holiday weekend.
WILLIAMS: Yes, I mean, you're exactly right. What we found is historically, high gas prices alone do not deter people from traveling, particularly if you're talking about traveling, doing their holiday destination.
What we found is, high gas prices have more of an impact on people's daily travel, like back and forth to work and running errands. Because when you all -- when you add it all up, when you're traveling on this Labor Day weekend, it's going to cost you probably just a little bit more than last year, and that price will equate to maybe the price of a large cheese pizza. And that's usually not a deal breaker to prevent people from traveling.
COLLINS: Pizza never a deal-breaker, I know that much.
What about some of these investigations that have been asked for along the lines of price fixing? What do you think about that?
WILLIAMS: Well, I think there have been times in our recent history where that might have been warranted, but I think this particular case right now, it's going to be a pretty hard case to make. I think the bottom line is this, is that the market does not like uncertainty, and the people who distribute gas, as well as people who produce the gasoline, they don't want to buy lots of inventories at these high prices.
So once (UNINTELLIGIBLE), once the prices start to go down, which I think they expect to happen in autumn, you will see inventories start to shore up. I think it's just the fact that our refinery capacity has not been expanded, and there's just very little room for error.
COLLINS: yes, and in the past, when these price spikes have been investigated, certainly no illegal manipulation has been found by the oil industry, that's for sure. I want to point out that out.
All right, Mantill Williams, we appreciate you being with us this morning from AAA. Happy Labor Day weekend.
WILLIAMS: All right, thank you. All right, you too.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired August 30, 2003 - 09:20 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Well, the highways will be crowded this weekend. According to AAA, more than 33 million people, in fact, will be traveling far away from home. That's the highest number since 1995. And more than 28 million will be taking their trip in the family vehicle, family truckster.
But travel by car this holiday weekend can be a budget buster. Check out these prices now in Boston. And they are worse on the West Coast. Nationwide, gas prices took one of the biggest two-week jumps in history.
Gas prices are on a roller coaster this year. In March, we saw a big spike just before the war in Iraq. Then it cooled off a bit before hitting a record high this week of a whopping $1.75 on average for a gallon of unleaded gas.
Why this big hike, and when will it end? Let's get some feedback from Mantill Williams. He's a spokesman for AAA and the American automobile Association, as we know them.
Thanks so much for being with us.
MANTILL WILLIAMS, AMERICAN AUTOMOBILE ASSOCIATION: Thank you. Good morning.
COLLINS: (UNINTELLIGIBLE) we appreciate it.
WILLIAMS: Thank you.
COLLINS: Why is gas so expensive right now?
WILLIAMS: I think it's a number of factors. But probably the three main reasons is, number one, inventories. Right now, we haven't built a refinery capacity in the last 25 years.
And then secondly, usage. Gas usage was actually at its highest between mid-July and between July and up to now. And what we're finding is that we had, we were using 9.4 million barrels of gasoline per day.
And then third, we had a number of disruptions in the system. The blackout, that actually drew down supply, because it took awhile for some refineries to get back online. And then also in Arizona, we actually have a pipeline go down. And we had a few other refinery outages across the country. So keep in mind, we have a system now where there's very little room for error. So if just one thing goes wrong, then these prices are going to jump up somewhat. But we had a number of things go wrong, so that's why we're seeing these big price spikes.
COLLINS: But you know what? It's interesting, in thinking about how expensive gas is, that we're going to have a record year as far as people hopping in their cars, filling up with gas, and then driving away for the holiday weekend.
WILLIAMS: Yes, I mean, you're exactly right. What we found is historically, high gas prices alone do not deter people from traveling, particularly if you're talking about traveling, doing their holiday destination.
What we found is, high gas prices have more of an impact on people's daily travel, like back and forth to work and running errands. Because when you all -- when you add it all up, when you're traveling on this Labor Day weekend, it's going to cost you probably just a little bit more than last year, and that price will equate to maybe the price of a large cheese pizza. And that's usually not a deal breaker to prevent people from traveling.
COLLINS: Pizza never a deal-breaker, I know that much.
What about some of these investigations that have been asked for along the lines of price fixing? What do you think about that?
WILLIAMS: Well, I think there have been times in our recent history where that might have been warranted, but I think this particular case right now, it's going to be a pretty hard case to make. I think the bottom line is this, is that the market does not like uncertainty, and the people who distribute gas, as well as people who produce the gasoline, they don't want to buy lots of inventories at these high prices.
So once (UNINTELLIGIBLE), once the prices start to go down, which I think they expect to happen in autumn, you will see inventories start to shore up. I think it's just the fact that our refinery capacity has not been expanded, and there's just very little room for error.
COLLINS: yes, and in the past, when these price spikes have been investigated, certainly no illegal manipulation has been found by the oil industry, that's for sure. I want to point out that out.
All right, Mantill Williams, we appreciate you being with us this morning from AAA. Happy Labor Day weekend.
WILLIAMS: All right, thank you. All right, you too.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
