- The Washington Times - Tuesday, November 14, 2000

Washington-area drivers have seen a recent drop in gasoline prices, thanks primarily to competition among neighboring gas stations.

And for some station owners, the price drop for regular unleaded gas has made a difference with customers even though they are only saving a couple of pennies per gallon.

Capital Plaza Amoco in Hyattsville, Md., has marked down its regular unleaded gas price by eight cents in recent weeks.

Since dropping the price to $1.49 per gallon beginning Oct. 18, owner Greg Dressel has seen an increase of about 30 percent in the amount of gas being pumped at his station. He said it's a direct result of slashing his price from $1.57 on Oct. 14.

The lower price, however, does not mean that his business is making more money. He has to sell more of the lower-priced gas to break even, because not as many dollars are coming in.

Mr. Dressel said he's had to cut his price to keep pace with competing gas stations in nearby towns where prices have come down slightly.

"Dealers continue to squeeze themselves," Mr. Dressel said. "It's a cutthroat business. Gasoline dealers do live and die by pennies."

And consumers do, too, according to some local gas station owners.

"There's people who drive five miles for one penny less," said John Distad, owner of Distad's Amoco on Pennsylvania Avenue in Southeast D.C.

The Amoco station has dropped its price to $1.59 for regular unleaded in the past two weeks a decrease of about 2.5 cents.

"Two or three cents a gallon means a lot to me," he said. "I hope [it will make a difference] to consumers."

On the national level, unleaded regular self-serve gasoline prices fell to an average of $1.52 a gallon for the week ending yesterday, according to the U.S. Department of Energy. That's down about four cents from Sept. 18.

Prices can fall in certain areas based on several regional factors like supply and demand and competition among retailers, said Justin McNaull, a spokesman for AAA Mid-Atlantic.

"Competition is a remarkable market force," Mr. McNaull said. For instance, gas prices in the District are likely to remain higher, because there's less competition there compared to the market in the suburbs.

Crude-oil prices have stayed above $30 a barrel for the past three months about 30 percent higher than last year and three times the level in December 1998.

The Organization of the Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world's oil, has boosted its production four times this year in an effort to keep oil costs in check. The United States consumes about 18.6 million barrels of oil a day.

The Energy Department last week said oil prices will probably drop by $4 to $5 a barrel by the end of the winter because of rising world supply.

"You have to keep up with the barrel price," Mr. Distad said.

In September, President Clinton ordered the release of 30 million barrels of oil from the Strategic Petroleum Reserve in an effort to keep fuel prices from jumping because of low stocks of crude oil and home-heating oil.

Mr. Dressel said the dealer purchase price went down by 4 cents within the five days after Mr. Clinton decided to open up the reserves. "There would be a public outcry" if dealers didn't drop their prices, too, Mr. Dressel said.

Many of the area's gas stations have marked down prices by at least two or three cents. Others have doubled that.

Bel Pre Layhill Mobil slashed its unleaded gasoline price to $1.55 a six-cent decrease from about a month ago.

"It's made a big difference for the customer," said Zahoor Mahdi, general manager of the Silver Spring station.

Mr. Mahdi said his price drop is a result of decreases by the oil companies.

"The oil companies give us cheaper gas, so we sell cheaper gas," he said.

Kim's Texaco on Pennsylvania Avenue in Southeast D.C. hasn't dropped its price within the past two months, but hasn't increased it either, said owner Myong Kim. He said when the wholesale price decreases, he'll pass that on to his customers.

Mr. Distad doesn't think prices will drop much further because the holiday-travel season is approaching. It's likely oil companies will hold off before bringing the prices down any further because there will be greater demand for gas within the next couple of weeks, he said.

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