- The Washington Times - Monday, September 19, 2005

The cost of gasoline in the District fell 17 cents to an average $3.08 for a gallon of regular over the weekend, down from a record high of $3.38 two weeks ago as Tropical Storm Rita churns toward the Gulf Coast, threatening oil refineries and gas prices again.

D.C. drivers are paying the second-highest costs in the nation, according to AAA’s analysis of the average price at the pump in the 50 states and the District. Hawaii drivers face the highest — $3.68 per gallon.

Only four states and the District have an average over $3. Maryland gas stations are close behind the District at $2.96. In Virginia, it’s $2.81.

Nationwide, the average price is down 17 cents from last week to $2.79, according to the U.S. Energy Information Administration.

The Mid-Atlantic states, which had the nation’s highest prices for much of early September, will experience the fastest-falling prices, said Michael Burdette, a senior oil analyst with the Energy Information Administration (EIA).

The EIA attributes the exceptionally high Washington-area prices to the decrease after Hurricane Katrina in supply traveling the Colonial pipeline, which carries fuel from the Gulf Coast and is resupplied near Philadelphia before sending additional fuel to the Northeast.

“Our area is at the far end of the unsupplied portion of the pipeline,” Mr. Burdette said. “And as a result, our prices are dropping faster than other areas” as the pipeline’s production improves.

The current decline may not last long. Just as the retail costs began to sink to pre-Katrina levels, Rita is threatening to turn into a hurricane and could hit the oil refineries along the Texas coast.

“The impact of Tropical Storm Rita [on retail prices] would be even greater if it turned into a full-blown hurricane and hit the Texas coast, adding to the number of refineries impacted,” Mr. Burdette said.

OPEC leaders yesterday were close to a deal to release an extra 2 million barrels of oil a day but were worried the storm would interrupt production.

Nigeria’s oil minister, Edmund Daukoru, said the Organization of Petroleum Exporting Countries was “very concerned” about Rita’s potential effects.

Fears of another hit to oil refineries raised the price of crude oil $4.39 to $67.39 yesterday on the New York Mercantile Exchange.

“Based on the NYMEX prices, if that holds, it would slow down the decline in retail prices,” Mr. Burdette said.

At the pump, drivers may see gas selling for $2.50 a gallon by the end of the year, the EIA estimates, pending any further damage to oil refineries.

Area motorists are skeptical regular fuel prices will decrease significantly.

“What’s the difference?” landscaper Benny Demouy said of the $2.99 gas price yesterday at the Four Corners Shell station on University Boulevard in Silver Spring.

Though the price had fallen about 17 cents over the weekend at that location, it’s not a big difference for his landscaping company, which fuels eight trucks and spent $1,200 last week at the pump.

“At this point, we have to have it,” Mr. Demouy said.

Miriam, a Silver Spring driver who did not want her last name used, was pleasantly surprised when she saw gas prices had fallen to under $3.

“I want it to go down, but I won’t be surprised if it goes up again,” she said.

“Prices are definitely going to fall,” said University Boulevard BP station owner Bobby Ead. “Prices are dropping by the day. They’re dropping faster on the street than to the dealers.”

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