Americans excited _ and suspicious _ about the recent slide in gasoline prices
Tuesday, September 26th 2006, 11:06 am
By: News On 6
WASHINGTON (AP) _ Energy experts pin the sharp decline in gasoline prices on basic market forces. Tell that to many motorists, however, and their eyes roll.
Two out of five Americans believe the November elections and politics _ not economics _ are behind the plunge at the pump.
Retired farmer Jim Mohr of Lexington, Ill., rattled off a tankful of reasons why fuel costs may be falling, including the end of the summer travel season and the fact that no major hurricanes have disrupted Gulf of Mexico output.
``But I think the big important reason is Republicans want to get elected,'' Mohr, 66, said while filling up for $2.17 a gallon. ``They think getting the prices down is going to help get some more incumbents re-elected.''
According to a new Gallup poll, 42 percent of respondents agreed with the statement that the Bush administration ``deliberately manipulated the price of gasoline so that it would decrease before this fall's elections.'' Fifty-three percent of those surveyed did not believe in this conspiracy theory, while 5 percent said they had no opinion.
Almost two-thirds of those who suspect President Bush intervened to bring down energy prices before Election Day are registered Democrats, according to Gallup.
White House spokesman Tony Snow told reporters Monday he was ``amused'' by the suggestion ``that the president has been rigging gas prices, which would give him the kind of magisterial clout unknown to any other human being.''
``If we're dropping gas prices now,'' Snow said, ``why on earth did we raise them to $3.50 before?''
The suspicion among U.S. motorists follows a post-summer decline in gasoline prices that even veteran analysts and gas station owners concede has been steeper than usual.
The retail price of gasoline has plunged by 66 cents, or 22 percent, since early August to average $2.38 a gallon nationwide, according to the Energy Department. That is 42.5 cents lower than a year ago, when the country's fuel output was devastated by hurricanes Katrina and Rita, which damaged platforms, pipelines and refineries across the Gulf Coast.
With competition fierce to sell the cheapest fuel on the block, gas is selling for less than $2 a gallon in many states.
``They want to gain market share,'' said John Eichberger, director of motor fuels at the National Association of Convenience Stores.
Jay Ricker, president of Ricker Oil Co. in Anderson, Ind., which owns about 30 gas stations and supplies fuel to 30 more, said he's thrilled to see pump prices sinking so fast.
More customers are buying mid-grade and premium gasoline, he said, and they're spending more cash inside his convenience stores, where profit margins are higher.
``I'd much rather sell them a doughnut or a fountain drink,'' said Ricker, whose stations are selling regular unleaded for a few pennies above $2.
Fimat USA oil analyst Antoine Halff scoffed at the notion that President Bush, or any politician, had the power to muscle around a global market.
The plunge in prices, Halff said, is the result of growing domestic inventories of fuel, slowing economic growth and toned-down rhetoric between Iran and the United States, which has been critical of Tehran's uranium enrichment program.
The selloff has been magnified, Halff said, by the recent retreat from the market by many speculative investors who got burned by the late-summer volatility. That said, ``the sky is not falling,'' said Halff, who believes oil prices will likely head higher again this winter.
Crude-oil futures soared to more than $78 a barrel in mid-July. On Tuesday, November crude futures traded below $62 a barrel.
``We have lots of gasoline supply,'' said Joanne Shore, an Energy Department analyst. U.S. inventories of gasoline stood last week at 207.6 million barrels, 6 percent more than last year and slightly above the five-year average for this time of year.
Indeed, at a suburban Miami Mobil station, where regular gas was selling for $2.66 a gallon, no one was buying in to the conspiracy theory.
``The decrease of gas prices is simply due to a seasonal adjustment of price,'' said Javier Gudayal, a 48-year-old civil attorney.
But in Los Angeles, which has some of the highest gasoline prices in the country, motorists wouldn't rule out the possibility of a government eager to sway the electorate.
Twenty-eight-year-old attorney Amnon Siegel sensed more than serendipity at work.
``I'm sure there's some sort of string-pulling going on,'' Siegel said, referring to the government.