Gas Prices in Myrtle Drop Below $2/gal

The Sun News | 01/29/2007 | Gasoline prices sink across Grand Strand

Isn't this fantastic news as we approach the summer vacation season!! Let's hope they stay around these prices for all of us who will be driving down to the Grand Strand this summer!
Gerry

Gasoline prices sink across Grand Strand
By Emma Ritch
The Sun News
Mark Fisher fills up his truck Saturday at the Amoco station on Third Avenue South in Myrtle Beach. The price of an average gallon of gas has dropped below $2 in the area.
JANET BLACKMON MORGAN/The Sun News
Mark Fisher fills up his truck Saturday at the Amoco station on Third Avenue South in Myrtle Beach. The price of an average gallon of gas has dropped below $2 in the area.

The average gallon of gas has dropped below $2 across the Grand Strand, and consumers could see even lower prices at the pumps during the next few weeks.

A mild winter reduced the demand on heating oil, leaving refineries to focus on making gasoline. That increased the supply and pushed down prices, industry analysts say.

The larger inventory, combined with dropping crude oil costs - a barrel has been hovering between $50 and $55, down from the high of $78.40 in July - means consumers get a temporary break when filling their tanks.

Dale DeWitt, who pumped 20 gallons of $1.99 regular gas into his Ford Explorer at a Myrtle Beach Exxon on Friday, said he's relieved prices have dropped, even if the savings are temporary.

"It's nice to look at the sign and see it's under $2," he said. "For a long time, I was thinking it wouldn't get this low again."

Gas prices typically bottom out in the last week of January and first week of February, analysts say. Drivers take fewer long-haul trips after the holidays, and homeowners cut back on heating costs as temperatures rise.

That means the Grand Strand could see prices lower than the present average of $1.99 a gallon in coming weeks, said Sarah Davis, spokeswoman for AAA Carolinas.

"Gas prices may drop just a little bit more, but there was talk about really boosting the inventory of the Strategic Petroleum Reserve. When there's less [gasoline] on the market, prices will go up," Davis said.

Typically, prices increase in March when refineries close for spring maintenance and start making summer blends of fuel, which are more expensive to produce than winter blends, Davis said. People also increase travel starting in February, reducing the supply.

Many gas stations on the Grand Strand could be selling gas at a loss to get to the $1.99 mark, said Jeff Lenard, spokesman for the National Association of Convenience Stores.

"A lot of retailers are eating that margin to get to that price point because $1.99 is a lot cheaper than $2 to most people," Lenard said. "More than a quarter of people say they would change their behavior for a penny a gallon."

Convenience stores make profits off the coffee or snacks sold inside, so the gasoline prices are one way to tempt consumers. Other stations that are continuing to sell gasoline at higher prices are still getting customers.

Lynne Mackey of New Jersey pumped $2.05-per-gallon regular-grade gas into her Nissan Altima, even though stations a mile away offered the same product for 4 cents to 6 cents less.

"I had to stop here," Mackey said. "I couldn't really go much further before I might run out of gas. And then, 6 cents isn't going to make that much difference."

Fuel costs reached all-time highs in the U.S. after 2005's Hurricane Katrina, which disrupted distribution and pushed prices above $3 a gallon in many parts of the Southeast.

South Carolina's average price for a gallon of regular gas was $1.96 on Friday, according to AAA Carolinas. Prices in the lower-Atlantic region averaged $2.14 last week, according to the U.S. government's Energy Information Administration. That's down 6 cents from the previous week and 21 cents from a year ago.

The region - which includes the Carolinas, the Virginias, Georgia and Florida - typically has lower gas prices than average. The EIA says the average U.S. consumer is paying $2.17 a gallon.

When it comes to how fuel costs could affect the Grand Strand's tourism industry, that's the price that matters.

"What's most important is not the price of fuel here, but the price of fuel in the region [the potential visitor] lives," said Brad Dean, president of the Myrtle Beach Area Chamber of Commerce. "Declining fuel prices should benefit us, not only by increasing disposable income, but also by giving consumers more confidence in their spending ability in the coming months."

Tourism officials have said the increased fuel costs of last summer caused many visitors to cut back on shopping, dining out and the length of their trips to the Grand Strand.

"Fuel prices play a role in vacation decisions," Dean said. "They certainly do impact discretionary income, and we benefit, and travel in general would benefit, when fuel prices are declining."

Many factors could influence the price of fuel in the next few months, Lenard pointed out, so no one can really predict where prices will go.

Weather that affects the supply chain could drive up prices, as could reduced supplies by OPEC.

Every dollar change in the price of a barrel of crude oil equates to 2.38-cent change at the pump, Lenard said.

Even fear plays a part, he said. As much as 50 cents of each gallon at times could be attributed to people stocking up on gasoline if they fear an impending shortage, he said.

"No one knows where prices will be," Lenard said. "Oil's a commodity and is traded as such. Sometimes the price reflects actual supply and demand, sometimes it reflects emotional reactions."

Dale DeWitt | bought gas on Friday

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