Gas Prices Drop Below $1 a Gallon

Gasoline prices at some Ventura County stations have fallen to levels near those before Iraq’s invasion of Kuwait and would be lower if not for federal and state tax increases imposed since August.

Two Oak View stations offered gas Tuesday for less than $1 a gallon. Oakview Shell on Ventura Avenue cut its price for self-serve regular to 99.9 cents, prompting a Thrifty Oil station two blocks away to undercut its nearby competitor by two cents Tuesday.

“I’ve gotten special discounts from the company, and I’ve thrown them all into the regular,” said Al Buczkowski, Oakview Shell’s owner, who said his wholesale prices are now six cents lower than on Aug. 1. Regular accounts for about 20% of his sales, he said.

“We have a lot of boaters and campers here at Lake Casitas who use regular gas, so I’m letting them go for it,” he said.

Some stations cut prices by as much as a nickel a gallon Tuesday after suppliers cut prices this week. Station owners contacted in a random survey said an average of about 30 cents a gallon has been knocked off pump charges since major oil companies began reducing prices in mid-December.

“It’s very cheap right now, but even with the prices going down, we haven’t been that busy,” said Bill Rayes, owner of a Moorpark Unocal station on East Los Angeles Avenue.

Industry analysts linked the trend to Arco and independent stations offering lower prices than competitors after the Kuwait invasion, which eventually forced leading producers to cut their prices.

But others contend that some big oil companies began shaving prices gradually in advance of the Jan. 15 deadline for Iraq’s withdrawal from Kuwait to mollify growing public opinion that a gulf war would be fought to keep down the price of gasoline.

“The majors decided to try and defuse the issue of war profiteering by pushing the prices down,” said Stephen Shelton, executive director of the 1,200-member Southern California Service Station Assn. “It would go against the public’s grain to see sons and daughters fighting and dying while big multinationals that draw oil from that part of the world are reaping record profits.”

Since the United Nations embargo kept Iraqi and Kuwaiti oil from world markets, retail gas prices have been driven by fear that crude oil would be more expensive in the future, industry analysts said.

Prices at first increased as commodity traders speculated that the likelihood of war would limit Mideast oil production. But prices began to fall when there was speculation about a diplomatic settlement and fell abruptly after the initial success of the aerial attacks on Iraq and the absence of a successful counterattack on Saudi oil fields, the analysts said.

The survey of 35 stations found prices for 87-octane, self-serve unleaded--which accounts for more than 60% of sales nationally--ranging from $1.149 to $1.339. Self-serve prices for leaded regular ran from 97.9 cents to $1.259 and for premium unleaded from $1.239 to $1.479.

Since Aug. 1, federal and state tax increases have added about 12 cents a gallon.

Don Gurke, owner of an Oxnard Unocal station on West Channel Islands Boulevard, said he was charging $1.179 for unleaded and $1.359 for premium unleaded on July 31. On Tuesday, the same grades were selling for $1.239 and $1.399.

“When you deduct the new taxes, the prices are down six and eight cents a gallon” from their late July levels, said Gurke, who added that he plans to drop his prices three to four cents a gallon by this weekend.

Whether prices continue to drop, or even remain at current levels, depends on the situation in the Persian Gulf, said Alan Dikes, owner of a Chevron station on South Victoria Avenue in Ventura.

Dikes said consumers should understand that the reactions of oil companies and commodities traders to world events have more to do with gasoline prices than supply and demand. Prices in the next few months will be governed by the leading oil companies’ feelings about the future availability of crude oil, he said.

“If they think they have control over supply, the prices will stay down,” Dikes said. “But if they think they’re going to have a hard time getting crude, the prices will go up whether it’s hard to get or not.”

GAS PRICES

LOW HIGH Self-serve: Leaded regular $0.979 $1.259 Unleaded $1.149 $1.339 Premium unleaded $1.239 $1.479 Full-serve: Leaded regular $1.199 $1.499 Unleaded $1.259 $1.699 Premium unleaded $1.439 $1.749

Source: Tuesday survey of 35 service stations in Ventura County