GAS WAR: WHOLESALERS CLAIM PRICE IS BELOW COST

The price of gasoline in Cape Girardeau has dropped below 90 cents a gallon at some service stations.

"That's below wholesale," says Bob Blank, owner of Bi-State Oil in Cape Girardeau and one of two service station groups that have left their prices at 99.9 cents.

"That's below our cost," says Jim Maurer, general manager of Rhodes Oil Co. in Cape Girardeau, which also left prices at 99.9 cents.

Blank and Maurer say they went along when come competitors dropped their prices a dime a gallon last weekend, but had to draw the line on the second 10-cent drop.

Gasoline prices plummeted to 89.9 cents a gallon at some Cutmart, Kwik Pantry and other stations Wednesday, marking the lowest gasoline prices motorists have seen here since November 1991, when stations dropped their pump prices to 79.9 cents a gallon for self-serve regular unleaded gasoline.

"We just can't justify the drop," said Blank. "We can't see it as a good business practice. That's less than we paid for the gasoline in our pumps."

Blank said the first dime drop, which put the consumer cost at 99.9 cents, dropped prices below many of those in the St. Louis metropolitan area.

"I was in St. Louis Wedneday," he said. "The lowest cost I noticed there was $1.02."

"I just can't see how anyone can hold it at 89.9 cents," said Blank. "That wouldn't even let us recover the cost of gasoline much less the overhead."

Maurer agrees.

"We've were sitting here last week with prices at $1.09 working with a little bit of a margin when they dropped it to 99.9 (cents)," he said.

"Wholesale prices have not dropped," he said. "That 89.9 price won't cover our cost. I can't understand the strategy."

Blank and Maurer agree that most oil companies monitor gasoline prices at other stations and are forced to drop their own price when others do the same.

"For some reason somebody drops their price and there goes (the price)," said Maurer. "That's the way it works. But, we're going to have to do some serious thinking before we started selling at a loss."

Cutmart spokesmen could not be reached for comment.