Pantry CEO: Gas Supply Could Be Problem For Consumers In Future
Posted October 8, 2005 11:34 a.m. EDT
RALEIGH, N.C. — At $3.07 a gallon, North Carolina has the third highest gasoline prices in the United States, behind Hawaii and Washington, D.C.
For the short term, in North Carolina, gas prices may have reached their peak and may soon level off, but supply could be the biggest problem for consumers in the future, the CEO of The Pantry, Inc. said Friday.
"I don't think we have a long term to look at [with more than $3 for gas prices]; I think this is probably a three-week event," said Pete Sodini, who operates 1,400 gas stations across the Southeast.
But, supply may not be able to keep up with demand, he added
"There isn't a sufficient product right now to satisfy everybody's needs all the while, 24 hours a day. There's just not," Sodini said.
The N.C. Petroleum Marketers Association wants the state to cap and then gradually decrease its 27-cent a gallon gas tax. But Sodini thinks cutting the gas tax would be a bad idea.
"The state of Georgia did that several weeks ago after Katrina," he said. "I think it was an absolutely stupid thing to do because when you're in an era of short supply, why do you want to stimulate demand?"
Sodini said he can get only 55 percent of his normal allotment from suppliers. If the tax was cut and the price went down, he said many gas stations would run out of gas.
"When you're in short supply, you don't lower the cost," he said. "You're trying to discourage consumption; and unfortunately, the best vehicle to do that historically has been price."
A futures trader recently predicted that the price for gasoline could reach $5 a gallon.
"That's a doomsday scenario," Sodini said. "If Saudi Arabia goes out of business or some major country, sure you could get there. But, I think that's irresponsible."
In the short term, Sodini said the most irresponsible actions have been when people buy in a panic and unnecessarily top off their vehicles.
Sodini said at his 1,400 Pantry and Kangaroo stores, he restricts customers to $50 per gas purchase and has banned filling loose gas containers.