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AAA reports local gasoline prices dip ever so slightly

by James Fisher

STAFF WRITER

A report released last week by AAA indicates that gasoline prices in the state have fallen slightly. But long-term relief at the pumps won't be evident until the OPEC nations are able to reach an agreement about oil production increases.

Even if they do, it will take weeks or months for decreased prices to be seen on billboards at area gasoline stations, according to West Virginia University economy professor Tom Witt.

OPEC ministers met in Vienna, Austria, on Monday and Tuesday in an attempt to hammer out an agreement that could boost crude oil production by up to 1.7 million barrels per day. Iran was the only country holding out.

After talks broke off Tuesday with Iran still dissenting, the remaining OPEC countries reportedly were expected to go ahead with the increase without Iran's consent.

Despite the AAA report that gasoline prices dipped slightly last week, prices still are more than 50 cents higher than during the same time period last year.

The decrease, about 2 cents per gallon for self-serve unleaded, was most likely a temporary adjustment and might not indicate a long-term trend, Witt said.

According to AAA, gas prices in West Virginia last week averaged $1.56 for self-serve. Local residents seem to be in a little better shape, as gas prices in the Clarksburg-Bridgeport area fluctuated from $1.49 to a low of $1.43.

Still, a few cents difference doesn't seem to mean much when consumers can fondly remember a time just last year when gasoline was less than $1 a gallon.

"What the average consumer fails to recognize is that if you adjust for inflation, gas prices today are still relatively cheap and nowhere near the peak of the gas crisis in '79 and '80," Witt said. "The thing about gasoline prices is, it's probably the most visible price in today's society.

"If we required grocery stores to put out the price of milk every week, we'd start tracking that as an economic indicator," he said. "Gas prices are a very visible sign and sometimes it's a good indicator of inflation and sometimes not. Right now it's not, because we've had a rapid increase in prices. Overall, the rate of inflation is very low.

"One thing that I find amazing is that a year ago, a gallon of gas cost less than a gallon of milk and today a gallon of gas still costs less than a gallon of milk," Witt said. "When you figure that most of the oil comes from overseas, has to be refined and then shipped out and stored in huge tanks, it's a technological marvel that it's still as cheap as it is."

Despite experts' assurances that things are not as bad as they seem, West Virginians are still feeling the squeeze every time they pull up to the pumps.

"I just thank God I've got a credit card," said Mike McLaughlin of Clarksburg, who was filling up at the Kroger station. "It's still a pretty big shock every month, though."

In other industries, when prices are too high, consumers can shop elsewhere. Because gasoline prices are pretty much the same everywhere, consumers have little choice and many feel they cannot have an impact on the price.

"There is definitely something people can do. They can drive less," Witt said. "When gas usage falls off, the gas prices come down."

It may not be that easy for West Virginians.

"There's no way I can drive less," McLaughlin said. "I've been driving for 30 years and I'm not going to stop now. I really don't have a choice. There isn't really any public transportation and I can't carpool. What else am I supposed to do?"

Witt said McLaughlin's plight seems to be indicative of what many West Virginians and other Appalachians must overcome -- a rural environment and a dependency upon a vehicle for even basic needs.

Even people who believe a vehicle is a necessity rather than a luxury or convenience can be pushed too far, Witt said.

"OPEC knows they're walking a thin line," he said. "If the prices are too high, it will spur (oil) exploration and drilling in the United States and eventually take away the demand from them."

While a decent increase in oil production will eventually bring down prices in the U.S., Witt said consumers shouldn't expect to ever see the record lows of a year ago.

"I don't think we'll ever live there again," he said.

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