To borrow a line from the Rolling Stones hit ”Jumpin` Jack Flash,” the scene at a Hoffman Estates Shell station Friday was a gas, gas, gas.
Recession-weary customers were lined up 500 feet into Higgins Road for a cheap thrill: a tank full of regular unleaded gasoline at the giddy price of 92 cents a gallon.
”This reminds me of being 20 years old and driving your Trans Am,” said a beaming Keith Huspen, 31, as he pumped fuel into his economy car. ”Look at this, not even $5!”
The motor madness in Hoffman Estates Friday was part of a new reality at gas pumps in Chicagoland: prices tumbling toward or below $1 per gallon. Major oil companies are talking dollars for the most part, many of the off-brand stations are talking cents.
According to the AAA-Chicago Motor Club`s monthly survey, prices for the benchmark self-serve unleaded regular in Cook County dropped more than 7 cents in the last 30 days to an average of $1.13 per gallon. That includes about 53 cents in federal, state and local taxes, among the highest levies in the nation.
This month`s prices are 15 cents less than those a year ago and the lowest since December 1989. Gasoline was last under a dollar a gallon in March of that year.
For those driving outside Cook County in Illinois, the news is even better. Prices have dropped 7.8 cents in the last 30 days compared to 7.2 cents in Cook, but with the tax differential, the average for self-serve regular unleaded fell to $1.04.
In northern Indiana, where taxes are lower still, regular unleaded at self-serve stations was selling for 95 cents a gallon.
Adjusted for inflation, today`s prices are as low as they have been since the 1960s, said Daniel Yergin, author of a major study of the oil industry,
”The Prize.”
The cause of all this has been a virtual sea of crude oil production in the wake of the Persian Gulf war, with Saudi Arabia pumping at a rate of about 8.5 million barrels a day. That`s nearly a third of the output of the Organization of Petroleum Exporting Countries.
But OPEC doesn`t think it`s fun. The oil cartel is meeting this week in Geneva to arrange production cuts to shore up crude oil prices, currently about $4 less than the OPEC target of $21 a barrel. Ministers of the 13 OPEC nations failed Friday to come to a specific agreement, but some cuts seem certain. There is general agreement in OPEC that something must be done.
Saudi Arabia, however, has refused to trim its output to less than 8 million barrels a day.
The other 12 members-with Libya and Venezuela the biggest price
”hawks”-are pushing for bigger reductions.
Venezuela, stung by a failed coup this month, wants higher prices to bolster government revenue to meet social concerns.
Saudi Arabia retains a decisive role. Its agreement to curtail production by 500,000 barrels a day is a major concession. The other 12 want 100,000 barrels a day more out of Saudi Arabia and an overall cut of about 1.5 million barrels a day.
OPEC ministers meet again Saturday.
If it could be enforced, a cut of 1.2 million to 1.5 million barrels a day would would raise prices, but by only a few dollars a barrel, analysts say.
Crude oil prices have fallen about $5 a barrel since October. Pump prices for gasoline generally lag behind increases and drops in crude oil prices, as refiners and marketers watch to see whether the fluctuations will stick or swing back the other way.
What`s happening, according to industry watchers, is that pump prices are making the final catchup with the nearly five-month decline in crude prices. That unsettles OPEC, but makes consumers happy.
”Unbelievable! They gotta be losing money,” said Streamwood resident Bob Godfrey, who had pulled into the Shell station at 2 E. Higgins Rd. in Hoffman Estates for Friday`s bargain. ”If they`re going to continue this, I`ll be out here all the time-without a doubt.”
The station`s owner, Kenneth Rogner, insisted the price cut, in effect from 9 to 11 a.m., was intended to thank customers, not to spark a price war among gas stations.
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”Remember what Franklin Roosevelt said? I hate war. This is just for fun,” said Rogner, who plans to offer the same deal every Friday.
But Rogner`s competitors weren`t amused, particularly Khaja Mohiuddin, the owner and manager of a Shell station a block away.
”I am thinking he wants to increase the volume, but he`s losing money. The cost price is $1.06 a gallon,” said Mohiuddin, whose regular unleaded was going for $1.10 a gallon Friday.
”He`s taking business away from other dealers because he wants to be the king of this corner,” Mohiuddin said. ”It`s busy over there, and everyone over here is sitting here with no business.”
But not everyone is lowering prices. At D`Agostino`s Amoco station, 841 W. Irving Park Rd. in Chicago, prices were raised 3 cents Thursday night after wholesalers increased prices 4 cents in the last three days, said owner Joe D`Agostino.