Retail Gas Price Slips 1.5 Cents, Lundberg Says

Crude oil prices have plunged $8 a barrel in the last 10 days, but pump prices have dipped only 1.5 cents a gallon and “there is no sign of a price war in the retail marketplace,” oil industry analyst Dan Lundberg said over the weekend.

“Dealers aren’t taking advantage,” he said. “They are merely realigning themselves and catching up with the market.”

Ten days ago, when Saudi Arabian oil minister Ahmed Zaki Yamani announced that the price of crude could plunge to $15 a barrel, crude dropped to a seven-year low of $20 a barrel, Lundberg said.

There were widespread reports that wholesale and retail prices also would take a dive.

But pump prices dropped an average of only 1.5 cents, while wholesale prices dipped 3 cents a gallon, he said.

“Dealers over the past two weeks put an additional 1.7 cents a gallon in their gross profit margin. If you asked the typical dealer how come, he may say, ‘I’m thumbing my nose at those sheiks,’ ” Lundberg said.

‘Price War ‘Internationally’

“There is no question there is a price war internationally at the crude level. There is no question prices at the refinery gate have been falling. But so far they have shown no comparable decline at retail,” he said, and predicted there would be none.

In Lundberg’s latest price survey of 13,200 service stations nationwide, the average price of regular leaded at self-service pumps, the traditional price leader, was $1.07 a gallon, down 1.55 cents a gallon from two weeks ago.

The two-week survey ending Friday showed the average price of regular unleaded nationally was $1.14, down 2.08 cents from two weeks ago.

Full-service prices were an average of 21.5 cents a gallon higher but represented only 23% of all gasoline sales.

Lundberg said he found around 700 stations selling regular leaded at self-service pumps for under $1 a gallon.