Gas Prices Could Increase With MTBE Ban

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Gas Prices Could Increase With MTBE Ban

SARATOGA SPRINGS, NY -- A ban on fuel additive methyl tertiary butyl ether, or MTBE, beginning Jan. 1, 2004, in New York and Connecticut could causes price increases of 30 cents to 80 cents a gallon at fuel dispensers, according to the National Taxpayers Union, the federal Energy Information Agency and others.

Others observers, however, say no one knows what, if any, price increases will result from the transition to a different additive, according to a report in The (Saratoga, N.Y.) Saratogian.

Some areas of New York will be affect more than others, according to David Rothberg, gasoline marketing manager for Stewart's Shops Inc. Rothberg told the newspaper estimates of dramatic price increases could be "overblown," the news paper reported.

"It is all a guess," he said.

An October study by the Department of Energy's information agency estimated consumers in New York and Connecticut could face spikes of 30 cents to 40 cents a gallon, with prices coming down in time. Earlier this year, a study commissioned by the consumer group National Taxpayers Union estimated prices could sere 80 cents per gallon, especially during the summer when corn-based ethanol, the additive that will take the place of MTBE is thought to be unstable and hard to manage.

Some observers believe consumers in downstate New York could be hit hardest, because the Clean Air Act of 1990 puts stricter air pollution requirements on the high-population area. Others say price upstate is more uncertain, because areas with laxer environmental standards that do not need the ethanol additive may be supplied with a boutique fuel that is non-ethanol and non-MTBE, according to the report.

"We hope everybody's ready," Tom Peters, vice president of the Empire State Petroleum Association told the newspaper. "We hope the price increases to consumers are minimal. Our guys at the retail level are the ones that are going to take the brunt of consumer anger."

New York and Connecticut will join at least a dozen others who seek to limit or outlaw MTBE use, The Saratogian reported.