- The Washington Times - Tuesday, December 11, 2001

Motorists who spent last summer emptying their wallets at the gas pumps are enjoying a reversal of fortune, as the average price of gasoline has hit a two-year low.
The average retail price of regular gasoline is now about $1.09 per gallon nationally, the Energy Information Administration reported yesterday. It marks a 36-cent decrease from a year ago, and 77-cent decrease since May.
The average price around Washington is $1.14 per gallon of regular unleaded, with many stations in Virginia charging well under $1 per gallon, according to the American Automobile Association.
These prices come after warm driving season with a record-high national average of $1.76 for a gallon of regular unleaded last May.
"It's a significant difference, thank goodness," said Greenbelt resident Joy Clark, as she filled the tank of her Honda sedan at the Amoco station along University Boulevard near her home. Ms. Clark spent $15.29 for just over 13 gallons of regular unleaded, costing $1.15 a gallon.
Why the sudden price drop?
Those who track gasoline prices say filling up your car is almost always 10 cents cheaper from October to March because fewer cars are on the highway, thus driving down demand. Add to that, a slowdown in the world economy cutting demand for crude oil, and mild temperatures throughout the country. The warmer weather has forced refineries to delay production of heating oil in favor of automotive gasoline, causing a supply glut in the United States.
"The cost of the raw product has dropped significantly," said Justin McNaull, spokesman for the Mid-Atlantic division of the AAA. Indeed, the price of a barrel of crude oil is now just over $19; it had cost as much as $35 back in May.
Discount gas stations in the District are charging less than $1.10 for a gallon of unleaded, while motorists in Prince William County, Va., have seen prices as low as 89 cents. The average price for a gallon of unleaded in Virginia, where gasoline is taxed at a lower rate than the District or Maryland, is $1.02. Also, price wars have heated up in areas where numerous stations compete for business.
"It's becoming a supercharged competitive environment," Mr. McNaull said.
Economists said there are other factors contributing to the decline in gas prices, many of them related to the events of September 11.
The Organization of the Petroleum Exporting Countries, has not cut production of crude oil since September 11. Economists say this may be due to fears it might be criticized for using oil as a weapon in the wake of the terrorist attacks.
OPEC said last week it may cut crude production as it aims to maintain a benchmark of $22 to $28 per barrel.
Post-September 11 travel fears, while actually increasing the number of people choosing to drive rather than fly, have caused a decline in the demand for jet fuel. Less demand for jet fuel has meant refineries can spend more time increasing inventories of automotive gasoline, said John Felmy, chief economist for the American Petroleum Institute.
Inventories of gasoline at refineries, which were nonexistent earlier this summer, grew beginning in August. The refineries had been under pressure to meet rampant demand and actually ended up with an oversupply of gasoline, which still lingers.


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