Grassley says gas prices could go higher

Gasoline prices jumped a dime-a-gallon in some Iowa cities overnight as hurricane damage is still being assessed at refineries in the Gulf of Mexico. Iowa Senator Chuck Grassley says he’s not surprised by the boost and expects the price of gas to escalate even farther. Grassley says “You would expect price to ration gasoline when refineries that make 20-percent of the gas in this country are shut down because of a natural disaster. That just is a law of economics. When you get less of something, it costs more. When you get more of something, the price goes down.” Grassley says President Bush is expected to make a move today which might bring some relief. The Strategic Petroleum Reserve will likely be opened up so those refineries will have crude to start processing just as soon as they’re up and running, instead of waiting for barges that are still out in the Gulf of Mexico, stranded by the storm, to come into port and unload. The government stockpile is some 700-million barrels of oil, stored in underground caverns in several southern states. Grassley says the reserve is only tapped in an extreme situation — and it appears we’re in one. He says “It’s really held for our national defense when war maybe would intervene and make it difficult for us to have the supply of oil we need. In the case of natural disaster, it’s been used one or two years ago and it was used also during the Persian Gulf War.” Tapping into the reserves, Grassley says, may keep gas prices from climbing much higher. Triple-A-Iowa reports the statewide average for a gallon of self-serve unleaded is now at two dollars and 55 cents, up a fraction of a cent from yesterday, but now at its highest point ever. The national average is 2-60 a gallon, also up slightly from yesterday and about a penny below the all-time high.