Pump prices beginning to level off Cost of regular is up only tenth of a cent since last month

'Things are stabilizing'

Some drivers paying at highest levels since December 1990

June 17, 1996|By Abbe Gluck | Abbe Gluck,AAA 1996 Maryland Gas Survey Pub Date: 6/15/96 SUN STAFF

To those for whom pumping gas these days is like pumping iron, the end is near.

Gas prices are finally leveling off.

The price of regular gas in Maryland rose just one-tenth of a cent since last month, to $1.33.8, according to the Mid-Atlantic Automobile Association of America.

Even so, the price of regular unleaded gas is the highest it has been since December 1990, when it hit $1.42.6 after Iraq invaded Kuwait.

Mid-grade gas prices also rose one-tenth of a cent, and premium prices rose four-tenths. Prices have not remained this steady from month to month since February.

"Well, they've stopped going up, which is the first indicator that things are stabilizing," said Joseph M. Coale, director of communications for Crown Central Petroleum Inc.

In April, gas prices jumped 8.8 cents to $1.24.7 per gallon. In May, they jumped another 9 cents.

But most observers said it will be a long time before consumers notice a real decrease in prices at the pump.

"Just like dealers were hesitant to raise prices because they didn't want to lose their market share, once prices were high and they started to recoup what they lost when prices were low, there's been hesitancy to drive them down," Coale said. "But it will happen."

Syeb Hussnan, manager of the Amoco station on 20th and North Charles streets in Baltimore, said prices should fall within six weeks.

"At least that's what we're hoping, because our volume is very low and we're not making money," he said.

Hussnan might have to wait.

The popularity of sport utility vehicles combined with increased auto travel in the summer means that although supply is up, downward pressure on gas prices will not be felt until the fall, said Don Schroeder, associate director of the Maryland Petroleum Council in Annapolis.

Even if prices do start to drop, stations usually change prices in two-penny increments, said Charlie Edwards, owner of the Mobil station in the 1500 block of York Road in Lutherville.

"Prices fell by four-tenths of a cent last week, but you're not going to see that on the street until they come down by a lot more," he said.

But things are looking up. The barrel price for the benchmark mid-Texas crude oil fell from its high point in April of $25 to $20.08 on Thursday, Schroeder said.

And consumers are noticing.

"I've seen it coming down," said Brenda Bond, filling her tank at the Exxon at North Charles Street and Stevenson Lane in Towson. " 'Plus' is lower than $1.50 now."

Prices have begun to level off because supply is up, Coale said. "The refineries seem to be at maximum capacity, about 95

percent," he said.

During the summer, demand also falls for heating oil, Schroeder said. "So there's a higher supply of gasoline out there than there was in March," he said.

Producers also have been reassured that oil is available from Iraq.

Two weeks ago, the United Nations temporarily lifted its oil embargo against Iraq, allowing the country to sell $2 billion worth of oil to buy food and medicine.

"One of the reasons that prices first increased is that people expected the embargo to be lifted, and it never was," Schroeder said. "Once it was, it brought the downward pressure on the price."

Despite the lifting of the embargo, no companies have actually imported the newly available oil, Schroeder said. He also said he did not know when or if they would.

Consumers also noted differences in prices from station to station.

"When there are a few together, there's competition," said Sonia Rhule, a customer at the Crown station at York Road and Stevenson Lane in Towson. "In rural areas, where they are spread out, then they take advantage."

L Station owners admitted they felt pressure from competitors.

"Amoco keeps jumping us, a penny up, a penny down, up and down," said Jenny Kim, owner of the Exxon station at 20th and North Charles streets in the city.

Luckily for consumers, Kim said, "I think the trend right now is a penny down, a penny down."

Gas prices

The price of a gallon of self-service, no-lead gasoline in Maryland: @January ... .. $1.132

February ...... 1.138

March ......... 1.159

April ......... 1.247

May ........... 1.337

June .......... 1.338

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