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Prices falling at the pump

Alaska lagging behind nation's downward trend

Posted: Wednesday, December 13, 2000

The price of regular unleaded gas has dropped 5 cents a gallon at Douglas Depot. Is that the first swallow to reach Capistrano, or just a lone duck flying the wrong way?

Jeff Hansen, manager of Taku Oil Sales, which owns Douglas Depot and a new gas station called Taku Fleet Fuel in the Lemon Creek area, said he wouldn't call it the start of a trend.

Both Taku stations are selling a gallon of regular unleaded for $1.859, down from $1.919 last week at Douglas Depot. Most other gas stations in town have also dropped their prices by 2 to 5 cents a gallon. A gallon of regular unleaded has cost between $1.899 and $1.999 in Juneau in recent weeks.

Taku Oil Sales recently received a barge from Seattle with a five- to six-week gasoline supply at a lower cost than usual, Hansen said.

"Our prices went down so we just reduced our price out there," he said.

Actually, gas prices are going down nationwide, including in the Pacific Northwest where some Alaska gas stations get their product, industry analysts said. But Alaska's average prices don't show a decline, according to the AAA, formerly called the American Automobile Association.

That could be because Alaska gas distributors receive barges from the Pacific Northwest only every few weeks. Gas stations in Juneau, for example, can't take advantage immediately of refineries' price reductions, as gas stations in Seattle can, Hansen said.

The AAA tracks prices, including taxes, at 60,000 self-serve gas stations nationwide.

The national average is below $1.50 a gallon for regular unleaded for the first time since Aug. 8, said AAA spokesman Geoff Sundstrom in Orlando, Fla. That's down nearly 6 cents a gallon from a month ago. The Pacific Northwest is enjoying price reductions of up to 10 cents a gallon in places.

Alaska's average, though, was up 2 cents a gallon for regular unleaded as of Tuesday, compared with a month ago, the AAA reported. Anchorage average prices are down about a penny a gallon from a month ago.

Sundstrom attributed the national reduction to more inventories at refineries after they completed their regular fall maintenance, a previously mild winter that hadn't caused refineries to spend more time making heating oil, less demand from winter drivers, and a slower economy that uses less fuel.

As for the Northwest, "just the inventory situation out there seems to have improved more than in other areas of the country," Sundstrom said.

Kevin Banks, a petroleum market analyst in the Alaska Department of Natural Resources, said the whole West Coast has seen lower gas prices. That's fundamentally because West Coast refineries' costs for crude oil, including Alaska North Slope crude, have declined in the past two weeks, he said.

But that doesn't mean pump prices will drop a lot in Alaska. Williams Alaska Petroleum, which owns a refinery at North Pole, also supplies its Juneau station out of Seattle. Its gas stations statewide have seen minor price fluctuations recently.

"I don't think we're going to see any precipitous drop (at gas stations) unless we see huge changes in crude," said Jeff Cook, vice president of external affairs for Williams Alaska Petroleum.

Retail gas prices don't drop quickly after crude oil prices drop, said Dan Zobrist, a petroleum economist with the state Department of Natural Resources. That's a nationwide phenomenon, he said, because gas companies use the lower price of their supply to increase their margins, he said.

You can check nationwide gas prices at http://www.aaa.com.

Eric Fry can be reached at efry@juneauempire.com.



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