Low gas prices pump up drivers

Less money in tank leaves more in pocket

February 11, 1999|By Melody Simmons | Melody Simmons,SUN STAFF

For Timonium housewife Pam Baker -- who car pools four times each day -- it's more money to spend on groceries.

For Andy Hoeckel, a 24-year-old carpet installer who logs 500 miles weekly to jobs in Philadelphia and Washington, it's lower expenses.

And for commuter Mary Sue Orfuss, the gasoline glut that has pushed prices as low as 69.9 cents a gallon is sweet "comeuppance" for the oil companies.

"I love the low prices," Orfuss says, while filling up at a Petro discount service station on York Road in Timonium, where fuel is selling for 89.9 cents a gallon.

With unleaded gasoline averaging 97.9 cents per gallon in Baltimore this week, according to the AAA Mid-Atlantic region -- down from $1.15 in January 1998 -- drivers are rejoicing over the lowest fuel prices in years.

And the bargains are expected to continue through the end of the year, said Mantill Williams, a spokesman for AAA.

That's apparent along York Road's busy corridor between Towson and Hunt Valley where 26 stations are competing for customers with prices that vary from 89.9 cents to 96.9 cents a gallon for regular unleaded.

Profit-starved dealers, meanwhile, are reacting to the competitive pressure.

At an Exxon station near York and Timonium roads, employee Don Scott rushes out to fill the tank, check oil, wash windshields and measure tire pressure -- once extinct services at a self-serve pump, but now making a comeback as a way to lure customers.

"A lot of people are just so stunned we're doing it," Scott says, wielding a squeegee and tire gauge while running a customer's credit card through the pay-at-the-pump machine.

Overall, Maryland gasoline prices are down nearly 2 cents per gallon from last month, according to AAA -- and are the lowest since July 1988 when 96-cent-per-gallon gas prevailed.

Nationally, the average cost is 96 cents per gallon, said AAA -- lower, when inflation is considered, than in the days of the Model T.

In 1920, for example, the average price of a gallon was 29.8 cents. Adjusted for inflation, that would equal about $2.43 per gallon today.

And experts say a 55 percent decline in crude prices over the past two years -- to just over $11 a barrel last month for benchmark West Texas Intermediate -- has cost thousands of jobs in the oil industry.

For retailers, there's little relief in sight.

With 41.9 cents from every gallon diverted to state and federal taxes, many station owners post profits of less than 5 cents per gallon, said Harry Murphy, director of technical services for the Washington-Maryland-Delaware Association of Service Stations.

"Most dealers are digging into their savings to keep their business going," Murphy said. "Some already have gone out of business. It depends on the strength of the dealer and if he has cash reserves. And I don't think there's a light at the end of the tunnel."

Commercial customers take a far different view.

"I like it," said Baltimore cabbie Mark Tartakovskiy, puffing on a cigarette in his Sun Cab while waiting for a fare Monday night at Pennsylvania Station. "It's more money for cigarettes -- their cost has gone up, while gas has gone down."

Fellow cabbie Jerry Hall of Sun Cab said he is saving up to $7 per day on fuel costs. "It means I might travel more and work longer," said the taxi driver of 34 years. "And ultimately, I make $15 to $20 more per day" in extra fares.

At a Merit station in Charles Village, a steady stream of customers pulled in Monday to pump regular unleaded for 85.9 cents a gallon and high-octane premium for 99.9 cents.

"It's been helpful," said Michael Walker, as he filled up his family car. A tow truck driver for Owings Mills Towing, Walker said he saves because he pays for his own diesel fuel at work.

Likewise, Mass Transit Administration officials estimate cheaper diesel fuel could save the agency up to $750,000 to run its 800 buses in the metropolitan area this year. In Dallas, Greyhound officials expect to save 4 percent on diesel for the company's 2,500 buses.

Still, as gasoline prices dip to as low as 69.9 cents in Salisbury and 85.9 cents along North Charles Street, station owners are being forced to sweat it out. Some are relying on food and soda sales to make ends meet.

"You can't make it on gas alone," said James Hudler, manager of Petro in the 2100 block of York Road, where regular unleaded is going for 89.9 cents per gallon. Plans to add a Subway sandwich shop by next year could boost profits, he said.

To help the industry, senators from oil states called on the Clinton administration and Congress last month to intervene. Legislation has been proposed to give modest tax relief to small oil operators.

"We're at a point where gas is cheaper than bottled water," said Joseph Coale, director of corporate communications at Crown Central Petroleum Corp. "We have 105 gas stations in Maryland and volumes are steady. Dealers can set their own price -- if you call 10 different stations, you'll get 10 different scenarios."

Sun staff news researcher Leigh Poitinger contributed to this article.

Pub Date: 2/11/99

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