Lower gas prices hailed

Friday, April 18, 2003 | 11:24 a.m.

SUN STAFF AND WIRE REPORTS

Prices at the pump are beginning to drop in the Las Vegas Valley and could drop even more, to the delight of motorists and gas station owners alike.

Don Kiernan, owner of Don's DI Shell in the 900 block of East Desert Inn Road, said the price of a gallon of regular unleaded gasoline is down 4 cents from a week ago to $1.93. Other stations are selling a gallon of gas for less than $1.90 a gallon.

Shell Oil Co. cut the price to its Southern California dealers by 12 cents a gallon this week, said Bob van der Valk, who manages bulk fuels for Cosby Oil Co. in Santa Fe Springs. Other major oil companies should follow suit, sending gas prices even lower within days, he said.

"This 12-cent decrease should show up today or tomorrow" at the pumps, van der Valk said.

Nevada stations get their gas from California refineries.

A Shell Oil spokesman declined comment on his company's wholesale prices.

Valley customers have noticed the price change and seem relieved, Kiernan said.

The average price for a gallon of regular gas in Nevada was $1.94 a gallon this morning, according to the American Automobile Association. That compares with $1.97 a gallon last month.

"It's a good start, I guess," Kiernan said. "But we're still paying too much for gas, even with the drop. If you drive across state line to Utah it'll be 10, maybe even 20 cents cheaper."

Nevada ranks third in the nation for high gas prices, behind California and Hawaii, according to AAA. After an investigation, Nevada Attorney General Brian Sandoval said earlier this month he found no evidence of price gouging by oil companies doing business in the state.

Sean Comey, spokesman for American Automobile Association of Nevada, said prices are expected to continue dropping slightly in the coming weeks.

"We're cautiously optimistic about the short term," Comey said this morning. "The long-term outlook is more uncertain, just because of the situation in Iraq and other factors that are difficult to predict."

The price of crude oil has dropped from nearly $40 to $28 a barrel, but it can take up to two months for the savings to trickle down to the gas pump, Comey said.

Mekell Joss, who was filling up this morning at the Shell station at the corner of Pecos and Wigwam roads in Green Valley, was also optimistic.

"My gas card was $20 to $25 more a month recently, but this can't keep up," Joss said. "And things seem to have settled down in the Middle East, so that's good news.'

Joss said to save on gas she's been combining errands to avoid unnecessary driving.

Mike Britts, who was also at the Green Valley Shell station, said he's still waiting for more evidence that the prices will go down significantly.

"I heard this would happen but I wonder how long the prices will stay down," Britts said. "And I don't think $12 on the barrel will affect prices at the pump much."

In the 45 years he's lived in North Las Vegas, Albert Olibas said he's seen the Las Vegas Valley go from "desert to all kinds of action" while gas prices have gone up and down "a million times."

"When they go up, they go up overnight," said Olibas, who was filling his tank at the 76 station at the corner of Bonanza Road and Las Vegas Boulevard this morning. "When they go down, it takes months."

Rich Gabriel, an engineer at Binion's Horseshoe, said he recently traded his 11-year-old Oldsmobile for a Dodge Neon in the hopes of getting better mileage.

"There's been a lot less in my budget with these high prices," said Gabriel, who was at the 76 station.

While gas prices have fallen 15 cents a gallon nationwide, according to data from the AAA, fuel prices in California have dropped only 7 cents a gallon and remain the nation's highest. Californians paid $2.10 a gallon for unleaded Thursday, more than 50 cents higher than the national average, according to the motorist group.

California dealers said they got a bad rap earlier this month when the California Energy Commission blamed service-station owners for not passing on the savings in oil prices to consumers.

Five oil companies control 85 percent of the California gasoline market and they have kept wholesale prices high, said Will Woods, executive director of Automotive Trade Organizations of California, which represents Southern California service-station owners.

"The price of oil came down weeks ago," he said, but wholesale gasoline prices didn't.

Dealers supplied pricing information this week to the California energy commission, which now places the blame on the oil companies.

"Those price drops were not passed on immediately to dealers," said Rob Schlichting, a commission spokesman. "We're finally seeing the drop we were expecting. It's a little later than we anticipated."

The commission had predicted gas prices would fall below $2 a gallon two weeks ago.

The commission also heard this week that major oil companies cut their wholesale prices, Schlichting said. The commission plans to seek further pricing data from the oil companies, although Schlichting was not sure if the industry could be compelled to supply it.

The Western States Petroleum Association, which represents major oil firms, said it can't comment on prices. But the high cost of gasoline reflects the state's high taxes and stringent standards imposed on refiners, said Anita Mangels, a spokeswoman for the association.

"Clearly, California has the cleanest gas in the world and that costs more to make," she said. "The fact remains that the market remains very competitive. It is scrutinized continually."

But the Utility Consumers Action Network, which monitors gas prices in San Diego, disagrees.

"The fact is that there's no competitive market out here," said Charles Langley, gasoline project manager at the consumer group. "It's in (oil companies') interests to create fuel shortages."

Langley expects gas prices in San Diego to drop over the next week.

Sun reporters

Emily Richmond and Timothy Pratt and the Associated Press contributed to this story.