Friday, October 24, 2008

Gasoline price dropped “below” $3 right before my very eyes. Will it last?

Gasoline prices are on the decline these days, and I had the strangest example of getting “ripped off” at the pump.

I was driving Wednesday afternoon around the area south of Chicago, and I happened to notice I could use gas in the car when I approached a Speedway station/convenience store on Lincoln Highway at Harlem Avenue (I’m not sure if I was IN Frankfort, Ill., or just outside of it).

BECAUSE THE STATION was on the Will County side of the street (literally, Cook County was just a few yards away), the taxes configured lower, so I paid $3.03 a gallon. I was able to fill up my car (a Saturn SL2) for just over $20.

As I pulled away from the station, I felt good. That was the lowest price I had paid in gasoline quite possibly all year. So I went about my business in the land where Joliet is just a short drive away.

About a half-hour later, my business was complete, and I was retracing my route to return to the civilized land of Chicago when I passed the same gas station. During that time, the price dropped.

It was now $2.999 per gallon. Admittedly, that gets rounded off to $3 when it comes to paying the cashier. But seeing that price gave me a jolt – both in that it was the first time in a long time that I had actually seen a gas station offer gasoline for a price starting with a 2 and because I felt a second of disgust that I had missed the chance to pay that lower price.

JUST OUT OF curiosity, I stopped, went back into the gas station/convenience store and asked, and was told by the manager that he had just finished resetting the pumps. He had literally in mid-day been given the approval to lower the price yet again.

Now I understand that gasoline is NOT the significant part of the business for these local franchise operators who have gas pumps as part of their store.

Offering me cheap gas was supposed to entice me to come into the store and buy some of the junk food, overpriced office supplies and other goods that he was peddling (and in fact, I bought a newspaper – the Joliet Herald News, out of curiosity as to what was happening locally).

For all I know, the store made more of a profit off my $0.75 for the Herald News than it did off my $22.36 I paid to fill up my gas (which considering that at the worst point I was paying nearly $40 to fill up was a good price).

I HAVE ALWAYS realized that it was not the gas station operators who were getting rich in recent months, as gasoline prices soared over $4 per gallon, and even had some people speculating that we would someday see the $5 per gallon price at least in downtown Chicago proper (where gas always costs more), if not in all of Illinois.

All this came soaring to my mind when I read a Chicago Sun-Times account Thursday about the price of a barrel of oil dropping below $67, which is resulting in some stations being able to price gas at as little as $2.81 per gallon (the metropolitan area average is $3.22 per gallon, according to the Chicago Motor Club, and I know a Shell gas station located one block from where I live was charging on Thursday $3.19).

Could Alaron Trading Group really be correct when it told the Sun-Times that gas prices could be as low as $2.80 average across the Chicago area? That could mean the cheaper gas price places could be charging as little as $2.50 per gallon (perhaps more, if they’re really determined to get you inside their convenience stores to buy those rubbery hot dogs or greasy pizza slices that no one with sense should ever eat).

Now a part of me wants to be optimistic. Prices are going down. Perhaps a sense of rationality is returning to the market.

PERHAPS THOSE ANALYSTS who offer lofty opinions are correct when they say that oil companies saw how much people hated paying prices in the $4 range for gasoline that they learned to “drive smarter” and use less gas.

Oil companies are realizing that more gasoline will be sold, which results in more of a profit for the oil companies – if not necessarily for the local gas station owners.

But then I wonder what yet-to-occur event will trigger a paranoia that will result in gas prices soaring again. I can’t help but see the lesson being that people in this country are so dependent on their automobiles and other motor vehicles that they WILL knuckle under and pay up.

Plus, we as a society have now been put into a mental place where we think gasoline for less than $3 per gallon is cheap.

I CAN REMEMBER when people were outraged to pay more than $2 per gallon, although a part of me is lodged enough in the past that I think paying anything much over $1 for a gallon of gasoline is ridiculous. I’m just like those old-timers who remember when “penny candy” cost one cent.

So where do I go from here?

There are times when I’d love to be able to scrap my car altogether and rely on public transportation. There’s a certain convenience to not having to worry about gas prices or finding parking spaces that I enjoyed back in the times of my life when I did not have an automobile.

But then I look at the funding cuts to mass transit and the rising fares that result in lower ridership, which means more service cuts. The whole thing becomes an endless cycle, which means I’m stuck with the need for a car.


EDITOR’S NOTES: People purchasing gasoline at stations in downtown Chicago were paying (,CST-FIN-gas23.article) $3.99 per gallon earlier this week.

Dominick’s supermarkets are working with BP to offer gasoline discounts to people who shop (,0,245367.story) at the two stores. It’s too bad I carry a card for Jewel supermarkets in my wallet.

Tensions in the Middle East, or even another hurricane in this country, could send ( gasoline prices back on the rise again.

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