Missouri gasoline prices among lowest in nation

<a href=www.stltoday.com>AP By JIM SALTER Associated Press updated: 03/27/2003 01:09 PM

ST. LOUIS (AP) -- Only Oklahoma can boast of lower gasoline prices than the Show-Me State, an analyst with AAA Auto Club of Missouri said Thursday.

The average price of a gallon of regular unleaded is selling for $1.51 in Missouri, second to Oklahoma's $1.50 and well below the national average of $1.67. Some states are still paying more than $2 per gallon, including California, where the average price is $2.17, according to AAA's nationwide survey.

The lowest prices in Missouri are in the St. Louis area, where a typical gallon of regular unleaded is selling for $1.45, said Mike Right, of AAA's St. Louis office.

Prices around the state and the nation have fallen sharply in the past month-and-a-half, and particularly since the war with Iraq began March 19.

The average price for a gallon of regular unleaded in St. Louis was $1.72 on Feb. 13 and $1.61 on March 19. Experts said the 10-cent drop in the past eight days comes as pre-war anxiety has given way to a feeling that the U.S.-led effort seems to be going well.

The price of gasoline is tied directly to crude oil. As war neared and investors worried about the potential for attacks on oil wells and interruption of supply shipments from the Middle East, the price of crude oil rose sharply, reaching $38 per barrel on March 7.

By Thursday, the price had dropped to around $28 per barrel.

Crude oil is like any other commodity,'' said Ronald Leone, vice president of the Missouri Petroleum Marketers and Convenience Store Association in Jefferson City. It's sold just like pork bellies or shares of IBM. There are many psychological factors that go into it, and they're difficult to predict or quantify.''

The drop in crude oil prices has allowed wholesale gasoline prices to drop from $1.07 per gallon on March 7 to 88 cents per gallon Thursday. When that happens, the retail price declines as well.

We deserved it, for crying out loud,'' Right said. We've been paying excessive prices for quite a while now.''

War anxiety wasn't the only factor. Internal strife late last year in Venezuela cut off much of that country's export of oil to the United States. Right said America imports 15 percent to 17 percent of its crude oil from Venezuela.

Prices at the pumps may be about to bottom out, Right said. As the weather gets warmer, more people travel so the demand for gasoline is greater. That usually leads to an increase in prices, though Right doubted they would exceed the pre-war highs.

``Hopefully we have seen the highest prices for 2003,'' he said.

But Leone noted that things could change quickly, depending on what happens in the Middle East.

There seems to be some certainty in the marketplace in how the war will end and that it will be a quick war with relatively little disruption in supply,'' Leone said. But you know, that could change tomorrow if Saddam Hussein sets a bunch of oil wells on fire or if the war doesn't go like we want it to go.''