Gas in Jackson drops below $2

Friday, September 15, 2006
Regular unleaded gasoline dropped to $1.99 a gallon at Basic Fuel in Jackson on Thursday. (Don Frazier)

Fuel prices dipped below $2 a gallon in Jackson for the first time in nine months, delighting motorists despite warnings from energy experts and gas-station owners that the market remains volatile and the low prices aren't likely to last.

"Big warning: It's temporary," said Julianne Neiman, an energy expert with the Smith, More & Co. financial firm in St. Louis. "It's not going to last."

Crude-oil prices have dropped to below $64 per barrel, the lowest level in many months. And barring a sharp rise in Middle East conflicts or another calamitous hurricane in the Gulf of Mexico, analysts are predicting prices may drop nearly 30 percent below the summer peak.

"What's been holding the prices up is the fear factor," said Neiman, who also co-authored "The Complete Idiot's Guide to the Politics of Oil."

Following two miserable hurricane seasons, no hurricanes have threatened the Gulf Coast yet, Neiman said. That has removed some of the fear that caused prices to increase.

Also, the economy has slowed, which causes people to consume less energy. The summer vacation season is also over, meaning driving -- and therefore demand for gas -- has dropped off considerably since Labor Day, she said.

But Neiman says she's not suggesting Americans are conserving energy.

"Not until they take the keys from their kids," she said. "People kvetch about it, but they don't do a lot about it."

Motorists didn't care about any of that, however. They were just thrilled to see the cheaper price.

When Troy Kracke of Wichita, Kan., saw that prices were below $2, he said he had no choice Thursday afternoon but to pull into Jaspers in Jackson.

"I thought, 'Whoa,'" he said. "I knew I'd better come in and get some. I couldn't believe it. It kind of shocked me."

Kracke has been in the area visiting his mother. When he left Wichita two weeks ago, the price there was $3.29.

Les Knott of Cape Girardeau was equally shocked.

"I immediately turned in," he said. "I thought I'd better get it now before it goes back up again."

Jim Maurer, co-owner of Rhodes 101 stores in Southeast Missouri, said prices in the area haven't been this low since November. Prices along East Jackson Boulevard were $1.99 at Jaspers and Basic Fuel, while the cost in Cape Girardeau was still above $2 a gallon, generally about $2.14.

Maurer said prices in Jackson are typically lower than in Cape Girardeau because the competition there is much more fierce.

"We've got a little gas war over there," said Maurer, whose company also owns the cash-and-check-only Jaspers. "The pricing is much more competitive. There are several over there that will cut their cost to nothing."

Cape Girardeau, Jackson and Perryville still have the lowest gas prices in the state, Maurer said. He said everything he's hearing indicates the prices will stay lower until around Thanksgiving.

"This market is just very fast at reacting -- and overreacting -- to a downward slide," he said. "Where it's going to go? I don't know."

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