ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, June 11, 1996 TAG: 9606110066
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: cHRISTOPHER L. BOYD STAFF WRITER
AFTER A LONG WINTER, oil companies shifted from making heating fuel to gasoline later than usual, but motorists now are seeing lower prices at the
Janice Carpenter saved enough on gasoline Monday to buy extra hamburgers for her children.
Carpenter, of Johnson City, Tenn., stopped at a Chevron station on Orange Avenue in Roanoke. After visiting friends in the city, she was on her way to Maryland.
"These prices are a pleasant surprise," she said, adding that the gas she pumped was about 10 cents a gallon below the $1.23 price she had paid at home. At that, Carpenter said she might be able to afford a few more burgers for her two children.
Gasoline prices finally appear to be falling, just as the nation heads into peak driving season. In the Roanoke Valley, gas prices have dropped 4 cents a gallon in the past week.
The national Lundberg survey found pump prices fell last week for the first time since November 1995, to an average $1.3686 cents per gallon for all grades. That was down 1.21 cents from the previous week. The drop was attributed to lower crude oil prices and the end of a supply shortage.
Terry Phelps, president of Petroleum Marketers Inc., a Roanoke wholesaler, said the price of regular gasoline is now between $1.11 and $1.19 throughout the Roanoke Valley, compared with $1.22 and higher in March.
Nationwide at self-serve pumps, where more than 95 percent of all gas is sold, the average per-gallon price was $1.31 for regular unleaded, $1.40 for mid-grade and $1.48 for premium, according to the Lundberg report, which is based on replies from 10,000 gas stations across the country.
At full-service pumps, the average per-gallon price was $1.61 for regular unleaded, $1.70 for mid-grade and $1.77 for premium, nearly 23 cents lower than Lundberg's most recent survey.
Phelps said gasoline supply and demand are now more evenly matched, resulting in lower prices for the consumer. He expects prices to continue to fall as people drive more in the warm weather.
"The year has kind of been turned upside down," said Bill Ryder, company spokesperson for Marathon Petroleum Co. in Roanoke. "This year, it was so cold around late February and early March for so long that refineries were forced to make heating oil rather than gasoline." That is usually the time gasoline sales begin to pick up. So suppliers and retailers were caught with short supplies of gasoline, just as motorists demanded more for spring driving, forcing up prices.
But for Daniel Petersen, store manager of the Uni-Mart convenience store on Gus W. Nicks Boulevard, the explanation could be linked to politics. "It must be election time," he joked.
President Clinton is the reason for the price reduction, Petersen said. "He took away part of the gas tax the other day after he added the tax a few years ago."
Analysts predict that consumers, despite being pleased about lower prices at the pump, will be angry about the profits oil companies are earning on refining.
For example, Unocal Corp. Chairman Roger C. Beach told shareholders last week that, largely because of refining profits, the Los Angeles company will earn as much in the first six months this year as it did all last year.
Unocal spokesman Barry Lane said the company's profits follow a tough time for refining operations. Unocal lost $7million on refining during the first quarter, and it wasn't until mid-April that the company raised prices enough to offset higher crude oil and cleaner gasoline costs, he said.
Edwin Rothschild, director of energy policy at the Citizen Action consumer group in Washington, D.C., predicted that refining profits would swell the bottom lines of big oil companies nationally.
``There is a significant drag or lag effect on the way down [in prices],'' he said. ``And the primary reason for that is the lack of competition in many markets'' where independent refiners and retailers have been driven out of business.
The Associated Press contributed to this story.
LENGTH: Medium: 79 lines ILLUSTRATION: PHOTO: PHILIP HOLMAN/Staff. Janice Carpenter of Johnson City,by CNBTenn., says finding gasoline cheaper than expected in Roanoke might
mean extra hamburgers for her children during their trip. color.