From high to low: Gas prices drop across the Midwest

AAA's daily fuel gauge report

By REX W. HUPPKE, Associated Press

INDIANAPOLIS (July 19, 2000 7:33 a.m. EDT http://www.nandotimes.com) - Indiana is leading the nation in low gas prices, with other Midwestern states close behind. It's a marked change for a region that a month ago was crying foul as prices jumped to more than $2 per gallon.

"It's gone from being the high-cost region to being the low-cost region in a matter of several weeks," said Jonathan Cogan, spokesman for the federal Energy Information Administration. "In the most basic sense, it's supply and demand."

Pipeline problems were blamed for the summer spike in Midwest gas prices, with the industry saying it couldn't deliver enough fuel to keep prices down. Now the industry says those problems have been remedied, although the Federal Trade Commission is investigating whether price-fixing was involved.

AAA motor club reported that gas prices in the Great Lakes region have dropped 30.3 cents per gallon since June, and in the rest of the Midwest they've come down 16.5 cents per gallon. The national per-gallon average for regular unleaded on Tuesday was $1.58.

In two-thirds of the states in the region, including Indiana, Kansas, Minnesota, Iowa and Wisconsin, the price for a gallon of regular unleaded gasoline is below the national average.

"I think what you're seeing is just normality being restored to the supply situation here in the Midwest," said Michael Pitts, executive director of the Indiana Petroleum Marketers and Convenience Store Association. "My understanding is that refineries are operating at about 95 percent of capacity, which is exceptional. Problems that we had earlier on a couple of key pipelines are taken care of."

That's great news to people like Scott Taylor, who on Tuesday was merrily pumping regular unleaded at about $1.27 a gallon into his sport-utility vehicle.

"This thing only gets about 10 miles to the gallon," he said outside an Indianapolis gas station. "It was killing me, really. It seemed like I was putting $10 into it every time I started it."

The high prices were making it hard for bank courier Kriz Nuetzman to do his job, because he was spending about $40 a day on gas.

"Now I spend about $20 a day," the Indianapolis man said. "I can actually make some money."

At a station in Clayton, Ohio, about 10 miles northwest of Dayton, assistant manager Brenda Barnett was dealing with a constant stream of customers paying $1.35 for a gallon of regular, down from a high of $1.69.

"We've been crazy here with the low prices," said Barnett, who lowered the price on Friday. "It's been nonstop. We've had to ask people, 'Please don't pump gas. We need to do a shift change."'

Adding to the good fortune of Indiana motorists has been a temporary suspension of the state's 5 percent sales tax on gas. Gov. Frank O'Bannon suspended the tax in June, declaring an energy emergency because the Midwest's prices were disproportionately high.

Now that things have changed, O'Bannon officials say there are no immediate plans to lift the suspension.

"What do we know about next week, will there be a shortage then?" asked Cheryl Reed, the governor's deputy press secretary. "We don't know. We're looking at this as a long-term effort."

Illinois also suspended its gas tax in June in response to the high prices, which last month averaged $1.98 per gallon of regular unleaded. Prices had dropped to $1.59 per gallon on Tuesday.

That's better, but not good enough for some. Susan Granville was paying $1.69 per gallon Tuesday to fill her car up at a Chicago gas station.

"You have no choice but to pay," she said. "They've got you over a barrel."

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-- Martin Thompson (mthom1927@aol.com), July 19, 2000