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

DATE: THURSDAY, July 13, 1995                   TAG: 9507140016
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE:                                 LENGTH: Medium

GAS PRICES BOOST COST OF RUNNING A NEW VEHICLE

Higher gasoline prices increased the cost of owning and operating a new car by well over a half-penny per mile this year, but falling fuel prices in recent weeks could reverse that trend.

Motorists spent a nationwide average of 41.8 cents per mile during the second quarter to own and operate their vehicles, the American Automobile Association reported Wednesday. That was 0.7 of a cent per mile more than they spent during the first three months of the year.

For an area including Virginia and other mid-Atlantic states, the increase - 0.6 of a cent per mile - was smaller, but the total operating cost - 42.8 cents per mile - was higher than the national average.

The second-quarter increase in driving costs comes after a nationwide drop in costs of 0.1 a cent per mile between the last three months of 1994 and the first quarter of 1995.

The AAA determines the average per-mile cost by combing costs of operating a vehicle such as fuel, oil, tires and maintenance with fixed costs such as insurance depreciation, registration, taxes and financing. The association's cost estimates are based on a combined national average of three U.S.-made cars: a subcompact Ford Escort, a mid-size Ford Taurus and a full-size Chevrolet Caprice.

The second-quarter vehicle cost of 41.8 cents per mile nationwide translates into a yearly overall vehicle cost of $6,270 for someone driving 15,000 miles per year.

Despite the reported quarterly cost increase, there was some good news.

Since their peak around Memorial Day, gas prices in the Roanoke Valley have dropped about 10 cents per gallon, sometimes more. This week, unleaded regular gasoline at self-service pumps was selling at between $1.04 and $1.12 per gallon in the Roanoke Valley. During the last week of May, the price at the pump for regular unleaded ranged from $1.16 to $1.20 per gallon.

"It's been trying to come down," said Robin Ducommun, pricing manager for Petroleum Marketing Inc. of Roanoke, which operates 59 Stop-Ins and supplies gasoline to other stores. "It's pretty much been like a yo-yo; one day it's up, one day down," she said.

"It's already moving down in spots," Hank Brabham, president of Brabham Petroleum Co. of Vinton, said of prices. "The last couple of weeks the [price] trend's been down, but the last couple of days it's leveled off," Brabham said.

"People are trying to hang on and make a little money where they lost it when it was going up," he said. Between March and Memorial Day, gasoline dealers had seen the wholesale price of gasoline increase by about 20 cents per gallon, faster than they could pass the increases on to their retail customers.

Brabham said he can't predict whether prices will continue to fall, stabilize or go back up. It has become harder and harder to make that kind of prediction in a market that can be affected by politics, war in the Middle East or speculators at home, he said.

by CNB