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September 2006

News & Media

Two Dollar Gasoline Has People Talking 
September 19, 2006 

WASHINGTON – Wedding guests typically comment on the blushing bride and her new man. However, gasoline below $2 a gallon was a main topic among guests attending a wedding in Gainesville, Virginia, reports The Washington Post.

“We were surprised to see gas this cheap,” a wedding guest told the newspaper, adding, “Everybody who went to the wedding was talking about it."

This weekend, the Gainesville retailers surrounding the Washington metropolitan area were sporting gasoline prices at or below the $2 a gallon mark for the first time since December of last year, notes the Post, igniting greater competition among retailers who have largely been relying on in-store sales to combat this year’s high gasoline prices and credit card interchange fees.

“After months of $3-a-gallon fuel, the tide has turned in the gasoline world because of a combination of factors: falling crude oil prices, the end of the summer driving season and easing tension in the global oil market,” writes the Post.

However, the Post says the “Gainesville fever” won’t catch on throughout the rest of the metro region, as D.C. and Maryland both have a higher gasoline tax than Virginia and analysts aren’t predicting current crude oil prices “to slip much further.”

Severin Borenstein, director of the University of California Energy Institute, told the Post that he questions how long the Gainesville-area retailers will keep up their $2 a gallon gasoline prices. “This is right down to the bone, there's no question about that,” he commented, noting that the wholesale price of gas is about $1.60 and with the addition of federal taxes, state taxes and credit card fees, “there isn't a lot of room for profit.”

“This is definitely something that will rebound in fairly rapid order,” Borenstein told the Post, adding, “Even if they aren't losing money on every single gallon, they're not making the money they need to be making to stay in business.”