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Area gas prices dropping

October 28, 2005|by KAREN HANNA

TRI-STATE

karenh@herald-mail.com

Record prices meant record profits for oil companies last quarter. With the summer driving season over, demand - and prices - for gasoline are meeting temperatures on the way down.

How far gasoline prices are likely to drop - or whether the trend will continue - is anyone's guess, said Ragina Averella, public and government affairs manager of AAA Mid-Atlantic.

According to AAA, the average price of self-serve regular gasoline in Hagerstown Thursday was $2.359 per gallon.

The average cost to fill up a 15-gallon tank was $36.53. That's more than $6 more than last year's average of $30.07, but still noticeably cheaper than last month's average of $41.32.

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While motorists paid $3 and more per gallon for gas last month, oil companies siphoned off record profits. Exxon Mobil Corp. became the first U.S. company to break $100 billion in quarterly sales.

With quarterly profits of almost $10 billion, the company outearned the annual domestic gross product of countries such as the United Arab Emirates and Kuwait. Royal Dutch Shell PLC's profits for the period were more than $9 billion.

Steve Roach, chief operating officer of Roach Oil, which operates 16 gas stations and convenience stores in the Eastern Panhandle of West Virginia and Hagerstown, said high gas prices seemed to dampen demand. Hurricanes Katrina and Rita, which lashed the Gulf Coast, diminished oil-refining capabilities.

"We had a very difficult time getting product," Roach said. "Being on the Mid-Atlantic, we're really just on the edge of the hard-hit areas."

As prices roses, demand for gas in the Northeast fell 8 percent to 10 percent, Roach estimated.

"All our prices were attributable to increases in price on the commodities market that were passed down to us on the supply chain," Roach said.

A majority of the oil refineries that were affected by the hurricanes are now up and running, Averella said.

Judging whether gas prices will go up or down, however, is "sheer speculation," she said.

Until the Labor Day holiday, when Hurricane Katrina sent gas prices soaring, Averella said drivers were meeting record oil prices with record traveling.

Oil companies rang up record profits.

That didn't help Roach Oil, Roach said.

"The falling gas prices is good news for everybody," Roach said. "It's good news for us."

The Associated Press contributed to this story.

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