Friday, October 24–Sinking Pump Prices A Bright Spot In Concerning Economy

OCEAN CITY – It may have taken a bigger calamity to make the astronomical gas prices plaguing Americans finally start to come down to earth.

One of the few bright spots in the last few weeks of the ongoing epic saga of the American economy was once one of the largest sore spots in the minds of consumers: the price of gas.

As Wall Street plummets, 401K plans dwindle and morale of the nation’s people starts to proverbially lean toward panic, the one thing that is actually helping Americans to keep a little extra cash in their pockets is the very thing that used to be a top financial concern for the American family.

The average price per gallon dropped below $3 last week in Ocean City for the first time since last February, and experts are predicting a continuing decline in gas prices at least until the end of the upcoming holiday season.

The price per barrel of oil peaked at $147 three months ago, causing gas prices to reach almost $5 a gallon in some parts of the country. Since then, oil prices have dropped 50 percent to around $71 per barrel as of last Friday, pushing the national average for gas to $2.82 yesterday, which according to AAA, is a 90-cent decrease from last month alone.

Donald Wheeler, a Baltimore native who was visiting Ocean City with his family last weekend, said the diminishing price of gas is certainly a welcomed change, though still a bit unsettling.

“It shows you how bad it’s gotten when gas prices are the silver lining. It doesn’t necessarily keep me optimistic about the economy, but at least I can be a bit optimistic about my own personal economy,” he said.

As gas prices all over the Delmarva peninsula continue to fall, including an average of $2.60 in Delaware or as low as $2.68 at the WaWa in West Ocean City on Thursday, consumers are starting to feel a bit of relief from the price pinch they’ve endured

Although last year at this time the average price per gallon was $2.77, consumers should remain optimistic according to mid-Atlantic AAA spokeswoman Ragina C. Averella.

“Gas prices in Maryland have fallen more than $1 per gallon since June 17, and AAA expects prices to fall faster and further in the days ahead,” she said.

A global economic slowdown is not the only thing that is pushing down the price of gas. According to the US Department of Energy, consumers have lowered their consumption of oil by 800,000 barrels per day from January to September of this year compared to the same time frame in 2007. The study cites that once the price per gallon got to $4 per gallon, many consumers went into “crisis mode and drastically changed their oil consumption.”

Chris Denny, owner of Cheers in Berlin, has recorded a decrease in demand over the course of several years.

“I’m buying and selling about 50-percent less gas than I did five years ago, and basing my price on what the guy down the street is doing,” he said.

As of Thursday, all gas stations in Berlin were offering gas at $2.69 and that trend stretched into West Ocean City, with all stations offering $2.69, except for Trader Lee’s at $2.83.

Denny predicts that, “gas prices will stay down at least through the end of the year or as long as the stock market continues to fall.”

Mid-Atlantic AAA spokeswoman Christine DeLise agreed with Denny’s theory projecting that low gas prices could stick around “at least until Thanksgiving.”

Locally, lower gas prices could have an impact with a few of the surcharges being implemented around the town, such as the cab fuel surcharge that was granted by the Ocean City Mayor and Council in August.

The surcharge approves a $1 per trip fee to be used by local cab companies to ease the sting on their gasoline expenditures due to the heighten prices at the time.

Councilman Lloyd Martin said of the ruling in August, “we’ll give them a surcharge to get them through the season and then we’ll go back and reset the fare if need be.”

Mayor Rick Meehan said that the council decided to extend the allowed cab surcharge of $1 until Jan. 2.

“We realize that gas prices are going down, but we felt like we should extend this for a few months to help cab companies catch up,” he said. “They waited for gas prices to rise pretty high before they came to us and asked for help.”

Local restaurants have not only had to endure rising food costs, but also fuel surcharges placed by distributors like Lankford-Sysco and Wagner and Sons. These surcharges have been added to the bottom line of a restaurant’s invoice, forcing customers to compensate for the rising delivery costs.

Michael Priola, executive chef at Nantuckets Restaurant in Fenwick Island, thinks that the lowering gas prices should address the surcharges.

“They [the surcharges] should go down, or at the very least, they should do like they used to do and absorb the up-front fee and just spread it around the invoice a little bit so it’s not as big of a slap in the face,” he said. “I realize that they are a business, but so are we. We don’t put a surcharge on a customer’s dinner check to compensate for our rising electric bill.”

Some restaurant workers and owners have expressed fears that since there is nothing to regulate a surcharge implemented by a company, the charges may stay in place regardless of the drop in gasoline.

Representatives from Lankford-Sysco did not return any phone calls to discuss their stance on the issue.

Yet as the national average for a gallon of gas falls, and the lowering price of a gallon could boost visitors to the local economy, consumers are not necessarily dancing in the streets as far as the price at the pump. Many interviewed for this story seemed to replace their perceived “widespread panic” with “widespread skepticism” as most thought there was a direct connection to the drop in gas to the presidential election on Nov. 4.

“It’s fishy that a month ago or so, gas prices were over a dollar more, and it will probably go right back up after the election”, said Baltimore resident Wheeler.

While some “at the pump” motorists thought that the rapid decline in price for a gallon of gas had more to do with price gouging and political vote pandering than it does with economic slowdowns in the global market, everyone agreed with the sentiments of one motorist, who despite declining an interview, yelled his answer out of his window as he pulled away: “at this point, I’ll take what I can get.”

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