World gas prices plummet due to increased oil exports

By BETH LUCAS
Collegian Staff Writer

Driving home might be a little easier for students because of recently lowered gasoline prices, and this trend is expected to continue throughout the year.

Gasoline prices are at a historically low rate, with regular unleaded averaging about 95 cents per gallon nationwide for self-service stations. This trend began in November, when prices first fell below $1 per gallon.

According to the Energy Information Administration, world oil prices were estimated at $9.25 per barrel in January. They were $18.60 per barrel in 1997 and are expected to rise to only $13 per barrel by the end of 1999.

Although the price decrease has caused layoffs and mergers nationwide, it does not seem to be posing a problem for the area.

"Gas sales are up because it is so cheap, but that is about the only difference," said Dave Foltz, manager of Walk's Service Center, 1692 N. Atherton St. He added any future price increase would likely not hurt his sales very much. "People are always going somewhere, and they need gasoline to get there."

The low rate is attributed to increased oil imports. Middle Eastern nations, including Iraq, have vastly increased their oil output. At the same time, the United States has slowed its oil production because of hurricane activity near oil wells by the Gulf of Mexico.

Greg Palazzari, manager of Greg's Sunoco, 605 University Drive, agrees the lower prices are good for drivers, especially in the winter, because more gasoline is used to run a car when the weather is cold.

Maria Mabilog (sophomore-hotel and restaurant management) said she has been able to drive home every other weekend rather than every other month because of the low prices.

"It seems like only pennies, but it helps a lot when you are filling an entire tank," she said.

The sales increase has not been as beneficial to gasoline stations in the area as to drivers, however, because retail rates are usually only pennies higher than wholesale rates.

Gasoline at Walk's is purchased from a wholesaler for 83 cents and sold for 85.9 cents, Foltz said.

"The wholesalers are making all the profit," said Charles Guyer, manager of Gibson's Texaco, 1310 S. Atherton St.

The Energy Information Administration projects oil prices will remain steady through the year 2020 based on the projected price of crude oil and economic growth, said John Cogan, EIA energy information specialist.

However, this could just be speculation, said Thomas Gresik, associate professor of economics.

"The (current) prices are low because supplies seem relatively abundant, but if that changes 20 years down the road, prices will go up and people will start consuming less oil."