Gas war in Millersville pushes the price to $1.07

Pumps are humming at 5 stations along Veterans Highway

November 01, 2001|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

At a motorists' oasis along Veterans Highway in Millersville, several gasoline stations vie almost daily to undercut the other guy as the price of gasoline has fallen across the state and country to its lowest point in two years.

In this part of Anne Arundel County, motorists are benefiting both from the nationwide drop and a price war among five gas stations close to one another.

The average price for a gallon of self-serve regular unleaded gasoline statewide is $1.27 per gallon, having tumbled 27 cents from a year ago, according to AAA Mid-Atlantic's latest survey. The national average is 2 cents lower at $1.25 per gallon; a year ago it stood at $1.57

In the Baltimore metropolitan region, the average price is $1.24, down 28 cents from a year ago. But at the Royal Farms and the Wawa Superstore on Veterans Highway, motorists have been filling up at a $1.07 per gallon in recent days.

"We've been very, very busy," Royal Farms manager June Gayle said Tuesday. "If it's too crowded at Wawa, they come here, and if it's too crowded here, they go there. Sometimes it gets a little hectic."

Before the events of Sept. 11, a weakening economy was putting pressure on wholesale and retail gasoline prices. But the Organization of the Petroleum Exporting Countries held steady its crude oil production levels even as demand slackened.

Yesterday, crude oil prices fell 69 cents to $21.18 a barrel - the lowest closing price in more than two years - on expectations that an oil surplus will mount as the U.S. slips into a recession.

Also, in the weeks after Sept. 11, aviation fuel demand was "nonexistent," said Jay Saunders, an energy analyst with Deutsche Banc Alex. Brown in Baltimore. With such a steep drop-off in September, "refiners responded logically by shifting their production to products like diesel, heating oil and gasoline ... and we've seen a strengthening of those inventories," Saunders said.

"We generally expect to see lower [gasoline] prices than now into the fourth quarter," he said. "Inventories are just too high."

According to the Energy Information Administration (EIA), which is a part of the U.S. Department of Energy, total motor gasoline stocks slipped last week for the first time in six weeks. Total stocks were down 0.3 percent to 208.3 million barrels. On the East Coast, gasoline stocks remained stable at 53.7 million barrels, but that was still 4.7 million barrels more than at this point last year.

Demand has been picking up in recent weeks, according to the EIA.

In the four weeks that ended Oct. 19, gasoline demand was actually 1.7 percent higher than in the comparable period last year, said Doug M. MacIntyre, senior oil market analyst with the EIA.

"While gasoline demand was down, at least in recent weeks it points to it being back at a normal growth," MacIntyre said. He pointed to people driving more rather than taking airline flights as one possible cause for the uptick in demand.

John C. Felmy, chief economist for the American Petroleum Institute in Washington, said OPEC and other world producers are keeping fuel supplies relatively constant, but that the demand picture is still complex.

"We've seen a slight resurgence in gasoline demand," Felmy said. "People are shifting between driving and flying as result of [tighter] security at airports."

Other big factors that could influence gasoline prices in the near term, Felmy said, include low consumer confidence, an OPEC meeting in mid-November, and a cold winter that would compel refiners to make more home heating fuel products rather than gasoline.

Roy Littlefield, executive vice president of the Lanham-based Service Station Dealers Association of America, said a volatile world arena right now makes it difficult to predict short-term prices. The association's regional chapter represents about 1,000 dealers in Maryland. "To have any kind of a crystal ball for a month or two, I don't know how you could do it," Littlefield said.

At the Royal Farms, the number of times a tanker comes each day to refill the stations' tanks is one way of gauging the station's price appeal to motorists.

Back in September, the tanker came about once a day as the gas station sold around 10,000 gallons a day, manager Gayle said. Over the last few days, however, the tanker's been coming three times a day, and the station has been selling between 17,000 and 20,000 gallons per day, she said.

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