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Gas prices drop slightly

December 21, 2000

Gas prices drop slightly



By ANDREW SCHOTZ / Staff Writer


Tri-State gasoline prices have dropped in recent weeks but remain higher than they were last Christmas.

Fuel industry observers remain cautious. Early cold temperatures may increase demand and oil production cutbacks may limit supply, forcing prices back up.

The average price of regular unleaded gas at Maryland's self-serve pumps was $1.48 per gallon on Thursday, according to a survey conducted for AAA.

That's down from $1.52 one month ago, said Colleen Healey, the manager of public affairs for AAA's Mid-Atlantic office in Philadelphia.

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One year ago, the same gas cost an average of $1.31.

The pattern was similar in Pennsylvania, where self-serve regular had an average price of $1.47 on Thursday.

The average was $1.54 a month ago, compared to $1.32 a year ago.

AAA's West Penn/West Virginia/South Central Ohio data showed a slight price decrease in West Virginia this month. Self-serve regular averaged $1.47 this week and $1.49 last week.

In mid-December 1999, the average price was $1.33.

Healey said that weather and demand are big factors. With earlier cold snaps in the region this year than last year, there's a higher demand for home heating oil, she said.

Gasoline and home heating oil are both derived from crude oil.

Members of the Organization of the Petroleum Exporting Countries (OPEC), which produces nearly half of the world's crude oil, have suggested cutting back output next year, according to the U.S. Department of Energy's Energy Information Administration.

OPEC's actions often dictate the worldwide fuel market, said Mike Lorenz, the vice president of petroleum support for Sheetz in Altoona, Pa.

"People have to understand it's the open market that's driving the prices," he said.

Under normal economic growth rate, the demand for crude oil will go up about three percent per year, Lorenz said. If the supply doesn't grow with it, or is cut back, crude oil prices rise.

However, OPEC's Web site says that local taxes comprise up to 70 percent of gas prices in some countries, which could be more of a factor than the cost of crude oil itself.

In the last three or four weeks, prices at the local gas pumps have dropped about 7 to 10 cents per gallon, said Scott Roach, the vice president of retail operations for Roach Oil in Martinsburg, W.Va.

Roach said that inventory in this region has picked up.

"Better supplies are pushing the price down," he said.

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