Originally created 11/15/00

Area gas prices fall to $1.20s



Despite OPEC's recent decision not to increase oil production, Augusta gas prices are at an eight-month low.

Prices at some stations are in the low-$1.20s for the first time since February, when the average price was $1.22 per gallon for self-serve regular unleaded.

Don't expect the trend to continue, though.

"Gas tends to get neglected in November and December," said Tom Kloza, spokesman for OPIS Energy Group, a New Jersey-based analysis company. "Refiners are making so much money selling heating oil and diesel that they can get by with a modest loss or even break even on gas sales."

Even so, Augusta's prices seem abnormally low. The national average Tuesday was $1.57 per gallon for regular unleaded gas. The Southeast average was $1.45; Georgia's average was $1.38.

"You have individual parts of the state where prices drop," said Henry Jones, owner of M.B. Jones Oil Co., an area Amoco distributor. "There are price specials, reductions - it's usually always short term."

Augusta has always had low fuel prices relative to the rest of the country, the result of Georgia's low gas tax, competition from independent dealers and the city's proximity to a major pipeline terminal.

Regular unleaded gas is $1.21 at the RaceTrac on Bobby Jones Expressway; $1.27 at Savin-Haven on Mike Padgett Highway; and $1.29 at the Pump-N-Shop on Columbia Road.

Tom Smith, executive committee member for the Georgia Association of Petroleum retailers, said Augusta's prices might be so low because of "zone pricing" by the major oil companies.

Integrated producers such as Exxon-Mobil and Chevron can sometimes increase or decrease wholesale prices in a targeted zone either to attract new customers or to increase competition from other brands.

"The old term for this is called a `gas war,"' Mr. Smith said. "But this is not among the retailers; this is between the oil companies."

Branded gas in Augusta has remained more than $1.30. Smith's Chevron on Walton Way and Sweetwater BP were each at $1.35, which is about average for the area's name brand fuels.

So while no one can say with certainty why gas prices in Augusta are so low, industry professionals generally agree prices will go back up.

"Come spring, and the driving season, there won't be enough gasoline to handle the demand. When the daffodils and the daisies start rising, gas prices will rise with them," Mr. Kloza said.

Reach John Bankston at (706) 823-3352 or jbanks15@hotmail.com.