Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, February 8, 1991                   TAG: 9102080297
SECTION: VIRGINIA                    PAGE: B3   EDITION: METRO 
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE:                                 LENGTH: Medium

GULF WAR DOESN'T HIT GAS PRICES

The price of regular gas was down to the range of $1.069 to $1.129 a gallon at many Roanoke Valley stations Thursday, and in some neighborhoods competition between dealers took prices as low as $1.05.

Branded stations were still higher than unbranded dealers, and some stations near Interstate 81 posted higher rates.

A weekly American Automobile Association survey reported an average of $1.187 per gallon for the state and $1.194 for Roanoke on Wednesday. The state average has dropped almost 5 cents a gallon since the Persian Gulf war started Jan. 16, according to the AAA survey.

The AAA said the national average for self-service regular gas fell 4.2 cents in the past week to $1.183 a gallon, the lowest since early August.

"I didn't think I'd see prices falling during a war. It's only because of the success of the U.S. and the allied forces," said Terry Phelps, president of Petroleum Marketers in Roanoke, a statewide distributor.

The price of crude oil, the source of gasoline, closed Thursday at $21.22 per 42-gallon barrel, just 50 cents higher than it was when the Iraqi invasion began. Some people in the oil industry had predicted the price would jump as high as $60 a barrel, Phelps said.

Prices have been rolling back, he said, but the supply is stable.

"Prices are dropping everywhere," said Calvin Bower, president of Roanoke Valley Gasoline Dealers Association.

Pockets of dealer competition led to a fairly wide range of prices Thursday.

Chevron was priced $1.10 to $1.30 in Salem, and Texaco was $1.18 to $1.38 in Roanoke.

In the New River Valley, Exxon regular was selling from $1.14 to $1.19 a gallon in Christiansburg and Blacksburg; Amoco and Citgo were down to $1.11; Wilco was $1.11 to $1.13, and Shell was $1.14 per gallon.

Independent stations selling unbranded gas are buying it on the spot market for 12 to 14 cents per gallon less than branded stations "and there's no way we can compete," Bower said.

The sad part, Bower said, is that it's getting harder to make a profit. He said his Amoco supplier lowered the price of gas only a half-cent a gallon, but other companies have had greater reductions.

Ron Lundy of Fuel Oil and Equipment Co., a Roanoke distributor, said, "margins [of profit] are real thin on the streets." Convenience stores are selling at lower prices than branded dealers, he said. "I wonder how much lower it can go," Lundy said.

The crude oil market is not as jittery as it was because the allied forces seem to have a handle on the fighting in the Persian Gulf, according to Lundy. The market is not as subject to war reaction as it was, he added.

Staff writer Cathryn McCue contributed information to this story.