CAMARILLO, Calif. -- On July 21, self-serve regular unleaded gasoline inched up another 1.98 cents a gallon, to $3.0150. That's the price, actually a third of a penny higher than the price, that caused gasoline demand shrinkage briefly last year, when hurricane damage to refineries created a gasoline shortage, according to the latest Lundberg Survey of approximately 7,000 U.S. gas stations.
Demand shrinkage would add to supply, which is already sufficient, and would promote price cuts at the [image-nocss] pump.
As always, that's given the fact that oil prices and hurricanes are not predictable. If no new threat to oil supplies emerges and no hurricane damage of last year's magnitude happens, then the current retail price will prove to be a peak twin to that of Sept. 9, 2005. Another reason that retail price slippage can occur is that ethanol prices have been retreating from their earlier dizzying heights.
For retailers, these past two weeks have allowed recovery of about three cents of lost margin. Nationally, margin is just over a dime on regular grade. In 12 of the major cities Lundberg surveyed, margin is less than half that. With news media and alternative fuels proponents excited about huge potential gasoline price hikes from hurricanes, Middle East confrontations and summer gasoline demand, the gasoline industry is being scrutinized and even demonizedinstead of cheered and respected as it should be, for attending to business as it maximizes supply, competes for sales and helps keep the U.S. economy on the road.
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