Area gas prices steadily falling

~ Experts disagree whether prices will drop below $2 a gallon before the end of the year.

It still may not seem like a bargain to most motorists, but area gas prices are falling fast, dropping from $2.50 for a gallon of regular unleaded just a week ago to as low as $2.08 on Thursday at one local gas station.

"It's fallen pretty quick," said Scott Blank, who owns three Bi-State convenience stores in Cape Girardeau. "We've seen a steady decline on the wholesale end of things every day, which has allowed us to drastically reduce our prices."

At Bi-State on Morgan Oak Street on Thursday, a gallon of gas cost $2.26. At Casey's on Independence Street in Jackson, the price was $2.08. At Dmart Citgo on Route K, a gallon costs $2.39 and at Kidd's on Kingshighway, the cost was $2.29.

Experts disagree whether prices will drop below $2 a gallon before the end of the year, but they all agreed on one thing -- the days of $1.19 a gallon are long gone.

Dr. Bruce Domazlicky, director of the Center for Economic and Business Research at Southeast Missouri State University, said it seems unlikely that prices will ever get that low again. In fact, he doesn't believe that they'll even get below $2 a gallon this year.

"It's hard to say where it's going to stabilize," he said. "And even if it does get below $2, I wouldn't expect it to be much below that."

Gasoline prices soared nationwide after Hurricane Katrina and Rita damaged oil rigs and refineries. The nationwide average price of $2.75 was down nearly 22 cents from last month but remained 57 cents higher than a year ago. The statewide average is $2.33.

The Missouri Department of Natural Resources Energy Center reported earlier this month that a drop in driving in September helped gasoline supplies improve. Last week's report indicated gasoline prices dropped slightly from September levels.

Blank thinks that the price of gas will continue to drop, with the travel season over and demand down. Plus, the price will continue to be pushed down as refineries in Texas and Louisiana continue to come back on line.

"When Rita hit New Orleans, that's the main channel of oil for us," he said. "When you turn around and hit Houston, you've hit 1 and 1-A of our supply line."

AAA spokesman Mike Right also said he's optimistic that prices will continue to decrease.

"I think we've got a shot at it by the end of the year," he said. "That's assuming the current trends continue, and that's a big assumption."

The price of crude is continuing to drop, he said. Inventories are improving and demand is reduced. There were also increased imports from other countries in light of the hurricanes, he said.

But there are still a lot of wild cards out there, he said, including the always volatile Middle East, problems in Africa and a problematic dictator in Venezuela.

"If there is a flare-up in any of these regions, we won't see a continuing decrease in gasoline," he said.

smoyers@semissourian.com

335-6611, extension 137