Area gasoline prices have sunk to their lowest level in 2 1/2 years, a trend observers attributed to softening consumer demand stemming from last month's terrorist attacks and cutthroat street corner competition.
“Gasoline prices are dropping everywhere,” said Mark Mahoney, a spot-market analyst with the Oil Price Information Service in Lakewood, N.J. Crude oil closed yesterday at $22.50 a barrel, down from over $30 during the summer, he said. Extremely slack demand for jet fuel has boosted refiners' gasoline-making capacity, he added.
Kathryn Pencheff, a spokeswoman for AAA Northwest Ohio, said prices appear to be the lowest since early spring in 1999.
Earlier this year, some local prices dipped into the high $1.10s for self-service, unleaded regular, but went no lower. Yesterday, prices in the low $1.10s were common and a few as low as $1.079 were reported.
W. Geoffrey Lyden III, president of TrueNorth Energy, a wholesaler and retailer that operates area Shell stations, said gas is likely to fall more. “Everyone's racing to 99 cents, I can tell you that,” he said.
“Somebody'll be losing money if that's the case,” said Doug Pike, the gasoline purchasing agent for Sterling Food Stores, when asked about 99-cent gas. Retail margins are down to a few pennies at best now, he said.
Mr. Lyden agreed, saying his current wholesale price, including taxes, is $1.109. The Toledo market is one of Ohio's most competitive, he said, which makes it difficult for gasoline retailers to make money.
“This is one of the best buys in the state” for consumers, Mr. Lyden said.
After an initial spike induced by fears of import disruptions, gasoline prices have fallen steadily since the Sept. 11 hijacked-airliner attacks on New York City and Washington. Analysts attribute the decline to expectations of a worldwide recession in the attacks' wake that would result in reduced energy consumption.
Hardest hit have been the airlines, which have slashed schedules in anticipation of reduced travel demand.
Mr. Mahoney said a byproduct of that situation is that refiners have all but stopped making jet fuel, which increases the supply of petroleum available for refining into gasoline.
“Unless the oil-producing nations get into the war, I do not see a price increase,” he said. The Organization of Petroleum Exporting Countries, he said, “would rather make a little money than no money.”
Mr. Pike said a price increase is possible later this week, considering the below-cost prices at some filling stations.
“Somebody's going to realize, `We're not making any money at this,'” he said. “But then again, it might not happen - nobody wants to be the bad guy to raise prices.”