Gas prices dropping about a penny a week

By Christopher Schwarzen The Macon Telegraph

Macon's gas prices are sliding, but experts say that may not last because of the approaching summer months.

Summer travelers traditionally see higher gasoline prices between Memorial Day and Labor Day, and that isn't expected to change, said Yoli Buss, AAA's director of traffic safety. Buss said Monday a gradual decline may turn upward closer to May.

"Right now, we're seeing prices drop about 1 cent a week," she said. "We think that will continue until it levels off, then with summer prices may go up again."

The Energy Department said last week that nationwide gasoline prices should peak this month and drop to an average of $1.46 a gallon for the summer, revising its previous expectations of soaring fuel prices into the vacation season.

This past weekend, Macon's average gas prices were $1.42 cents for a gallon of regular unleaded, 1 cent lower than the state average, Buss said.

"The problem with gas prices is that there is very little room to move," she said.

The Organization of the Petroleum Exporting Countries agreed less than two weeks ago to increase its production of crude oil, Buss said.

That increase in production will decrease prices in the United States. Competition for gasoline customers will also play a large part in keeping prices lower, she said.

"Consumers are going to look for the lowest prices," she said. "We've always seen that."

Paul Velayubam, owner of the Citgo station at Pio Nono Avenue and Mercer University Drive, said competition forced him to drop his price for regular unleaded to $1.26 a gallon.

"I'm trying this price this week to see how it goes," he said.

"We've had higher prices because of the cost of gas, but business was definitely slower."

Many consumers were at pumps along Pio Nono between Mercer University and Eisenhower Parkway. Average price per gallon of unleaded was $1.27. Near Riverside Drive and I-75, prices were averaging 12 cents higher.

Edward Futch pumped gas into his van at Velayubam's Citgo.

"It's been taking me $35 to fill this tank," he said. "This price here will keep down to $30. That's a big savings."

Futch said he keeps tabs on prices. One penny will make a big difference, he said.

"I saw the sign across the street at $1.27 a gallon and then this one at $1.26," he said. "It's only a little cheaper here, but that means I get more, doesn't it?"

Virginia Padgett of Eastman also was taking advantage of Macon's prices one block over at the Speedway at Pio Nono and Eisenhower.

"Most of the time when we're in Macon for a doctor's appointment I'll drive over here," she said of the Speedway. "Eastman's prices are always higher than Macon's, and this is one of the lowest I've seen."

The varying prices in Macon and the state are based on demand and availability, said Ed Norwood, president of Osan Atlanta Petroleum Corp. Osan supplies gasoline to about 50 stations in Middle Georgia. Thirty-five of those are Marathon stations in Macon.

"That explains the difference in price from one side of town to another," he said. "Often it's competition that drives the prices down instead of the cost of gasoline."

Norwood said gasoline prices for suppliers also is dropping in relation to the price per barrel. A barrel of OPEC oil is about $26.50 now. There are 42 gallons of oil in a barrel that must be refined into gasoline before it can be sold to individual stations.

But Norwood said stations often will drop prices faster than suppliers to keep up with consumer demands.

"You can't raise the price of gas fast enough when prices go up, but you'd better drop them when they go down," he said. "That's the tough competition."

Buss said most gasoline retailers only make a couple of cents per gallon. Federal and state taxes are also another reason gasoline is so expensive.

In Georgia, consumers pay less than 26 cents in taxes per gallon. It's one of the lowest states in the nation. In Florida, taxes are closer to 51 cents, Buss said.

http://www.macontelegraph.com/local/tue_local.htm

-- Martin Thompson (mthom1927@aol.com), April 17, 2000