Thursday, July 20, 2000

Gas reversal: Midwest now has country's lowest prices

By Sarah Anne Wright
The Cincinnati Enquirer

        The cost of gasoline has fallen faster than many Cincinnati drivers expected, as the Tristate benefits from prices that are now among the lowest in the nation. But hard feelings remain.

        “They gouge us every summer, every time it warms up,” Dale Puckett said in Crescent Springs, Ky.

Infographic: Gas prices around the Tristate
        A spot check of prices Wednesday by the Enquirer across the Cincinnati area showed prices as high as $1.55 and as low as $1.29 for a gallon of regular unleaded. Cincinnati's average price Wednesday was $1.47 a gallon, 10 cents lower than the national average, said Jennifer Ledonne, spokeswoman for AAA Cincinnati.

        Since June, the national average price for regular gasoline has dropped 7 cents a gallon, to $1.57 this week from $1.64, AAA reported Wednesday. Prices in the Midwest are some of the lowest in the nation, AAA said.

        The Midwest price spike appears to be over, say fuel analysts, who predict that the national average price could fall even more — to $1.35 — by September.

        In an example of how Midwest prices have fallen, Indiana — where Gov. Frank O'Banion acted last month to remove a state gasoline tax — now has the cheapest gasoline in the nation at $1.40 for a gallon of regular unleaded, AAA reported Wednesday.

        Hawaiians are paying the most, the national AAA survey showed, but within the continental United States, Californians pay the highest prices — an average $1.76 a gallon.

        What's caused the sudden turn in prices in the heartland, which a month ago had the nation's highest? Those high prices in June tempted wholesalers to ship more fuel here. Supplies had been low across the region.

        “The imbalance drove prices up and attracted new supply, new volumes,” said Joann Shore, an analyst with the Energy Information Administration in the federal Department of Energy. Now, “the stocks are back up,” and prices are down in response.

        In June, gasoline was in short supply in the Midwest due to pipeline problems and complicated delivery that goes along with the reformulated gas used in some markets like Chicago and Milwaukee.

        Today, the main pipeline to the Midwest — the Explorer Pipeline — is running at 90 percent capacity. Refineries are also at top volume. The distribution of reformulated gasoline is smoother.

        “This is the first time the Midwest has ever experienced this,” said Ms. Shore, who attributed the current higher prices in California to reformulated gas and the fact that it's an “isolated region” that cannot resupply quickly.

        Tristate consumers are happy prices are down, but remain wary of the future.

        “We're just catching up” to what the rest of the world pays for gasoline, said Bob Meyer at Honda East in Union Township. “America's had it so good, for so long.” Mr. Meyer says he doesn't shop around for gasoline, but was pleased to pay $1.39 at the pump Wednesday.

        “I saved about $5,” he said. “That's a six-pack.”

        Tristate gasoline station clerks say that although gas prices are down, people aren't spending their savings on purchases in the stationconvenience stores.

        “It's pretty much the same,” said Helen Friend, store clerk at the Shell station in Union Township.

        In fact, some customers have a new reason to complain. A pack of Marlboros last week cost $2.87. This week, it's $3.45.

        “Boy, if it isn't the gas, it's another thing,” Ms. Friend said.

        Enquirer reporters Mara Gottfried and Reid Forgrave contributed to this report.


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