Will gas prices go lower?

Published 5:00 am Tuesday, October 14, 2003

Officials in the oil and gas industry here are optimistic thatgas prices will continue to drop.

Travelers have enjoyed six weeks of declining prices at thepumps since the peak summer driving period ended after Labor Dayweekend, and officials predict that trend to continue.

“I think they will,” said Vicky Roberts, manager of the C-StoreExpress on Brookway Boulevard, where the price of regular gasolineMonday afternoon was set at $1.39 per gallon.

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Roberts credits two factors in the continuation of decreasingprices.

First, she said, the industry has become more stable. Recentlythe industry was destabilized by the war in Iraq, strikes inVenezuela, and a power outage that shut down most of the nation’sNortheastern region, including three refineries. Although power wasreturned relatively quickly, by the next day in most cases, ittakes several days for a refinery to begin production again afterlosing power because of physical and environmental safetyconcerns.

Also, a local “price war” has been keeping gasoline prices lowerin the local area.

“I think we have a price war,” Roberts said. “I don’t know thatfor fact.”

A price war is when one retailer attempts to steal business fromanother by lowering prices. The higher retailer has to compensateand prices are driven down.

Several stations Friday dropped prices on regular unleadedgasoline from their normal pricing, ranging from $1.39-1.48, toaround $1.30 to encourage customers to buy gas, Roberts said.

Amber Tarver, manager of the B-Kwik Food Mart station on Highway51, said her supervisors chose not to participate in the one-daydecrease.

“I’m not sure why we didn’t, but we didn’t lower our prices,”she said.

Roberts said prices should continue to decrease.

Tarver agreed.

“Prices do tend to go down in the winter, when natural gasprices shoot up,” she said.

Roberts predicted gas to drop to around $1.28 a gallon beforeleveling off, but added it may take six months to get there.

“I don’t think it’ll go any lower that that,” she said.”Competitive pricing may make it go lower, though. Of course, thatestimate is based on the industry remaining stable.”

A stable industry is what drives lower prices, she said, becauseit’s reliable. Roberts has her own, admittedly unrealistic, dreamsabout gas prices.

“I’d just like to see it get stable at a price everyone canafford,” she said. “Higher gas prices really hurt those on fixedincomes.”