Climbing gas prices not expected to hurt tourism

PANAMA CITY, FL - Gas prices continue to rise statewide but are still below 2008 prices, officials said.

And while the recession might alter travel, gas prices alone won't affect it.

Gasoline prices statewide have increased about 15 percent from May, or 36 cents, according to the AAA Fuel Gauge Report. Prices have gone up everyday since May 2, Gregg Laskoski, a spokesman with AAA, said in e-mail.

A gallon of gasoline cost $2.35 a month ago and is an average of $2.71 statewide. Panama City prices are a little lower than the state average at about $2.70. Among six responding gas stations surveyed, prices ranged from about $2.59 at The Service Station, 220 Mall Lane No. 2, to $2.76 for full service at Bailey's Service Station, 918 Cherry St.

Nationwide, a gallon of regular gasoline is an average of $2.69, Laskoski said.

The increase is partially due to a seasonal pattern, but the major reason retail gasoline continues to climb is escalating crude oil prices. Investors, nervous over a weak U.S. dollar, are buying into oil and precious metals, which drives up the price of crude oil, Laskoski said. When the dollar strengthens, oil prices will likely fall, he added.

Demand for gasoline is not increasing nor is it being consumed more than last year, Laskoski said.

"It really has very little to do with consumer demand," Laskoski said.

Crude oil went from about $53 per barrel in April to about $72 per barrel Friday, according to Laskoski and the New York Mercantile Exchange. Those prices mean gasoline could cost drivers $3 a gallon this year. Laskoski said he expects prices to continue to rise but at a slower rate.

Most analysts say retail prices are likely to peak between $2.80 and $2.90 per gallon, Laskoski said. That's still below the cost of gasoline during the same time last year - when gasoline peaked at $4 a gallon, according to the AAA report.

People may choose to stay closer to home because of worries about the recession, but gasoline increases alone are not expected to keep people from traveling, Laskoski said.

"My guess is that as much as we gripe about the price we're paying today, most of us remember paying $4 last year," Laskoski said.

Gasoline prices aren't preventing people from vacationing in the Panama City area. Vacationers are coming at a slightly higher rate than last year, said Dan Rowe, Bay County Tourist Development Council director. He said he does not expect gasoline prices to hurt area tourism this year. However, the effect of the recession with rising gasoline prices could grow to impact Bay County tourism, Rowe said.

The trolley is seeing more riders because of higher gasoline prices, said Allen Gray, Bay County public transit planner.

Trolley ridership is up 67 percent this year over last year, which Gray attributed to rising fuel prices and a poor economy. The Bay Town Trolley is expanding its services for the same reasons, he said.