The price of regular gasoline fell below 90 cents a gallon in some western and southeastern cities this week as part of a national price-cutting wave that should continue for at least another month.
Stations in Denver and its suburbs were selling self-serve regular gasoline for 87.9 cents a gallon, with unleaded priced at 95.9 cents -- a dime lower than the price at the same stations on New Year's Day. Prices in the Atlanta area were as low as 88.9 cents for regular and $1.029 for unleaded, according to the American Automobile Association there.
In the Washington area, the lowest self-service price found in an informal survey of stations by The Washington Post was 96.9 cents for a gallon of regular and $1.039 for unleaded.
Oil industry analyst Dan Lundberg, who runs a weekly national survey, said average prices all over the country are at the lowest level since 1979. He said prices should continue to fall, perhaps by as much as 20 cents a gallon over the next month or so.
Lundberg and other industry officials said the abrupt price drop this winter is a clear case of American consumers benefiting from the discomfiture of the Organization of Petroleum Exporting Countries. That once-solid cartel has been unable to stop maverick price cutting by its own members and other oil producers such as Great Britain.
Lundberg, publisher of the weekly Lundberg Letter, emphasized that the price-cutting is not restricted to independent dealers, but has been led in some areas by major oil companies such as Chevron, Conoco and Texaco.
"This is not some caprice, some move by a single company on a volume-building adventure," he said. "This is a general decline, where in all five principal regions of the country different oil companies have found themselves in the leading position as to cutting prices."
At Texaco's Houston headquarters, Phil Blackburn said the gasoline market in recent months has been "an intensely competitive business, with lots of supply and a strong push to sell product among all the companies."
He noted that the plunging price of foreign oil led to a 50 percent increase in gasoline imports to the United States in the first six months of 1984 over the year-earlier period. At the same time, consumer demand increased "only a few percent," he said.
A Washington Post survey of the lowest self-service price at gas stations in selected cities, as reported by gasoline wholesalers and the automobile association, found Denver and Atlanta to be the least expensive markets this week.
The survey found the following low prices: Houston, 91.9 cents a gallon for regular, 95.9 cents for unleaded; St. Louis, 93.9 cents for regular, 99.9 cents for unleaded; Boston, 98.9 cents for regular, 99.9 for unleaded; and Chicago, 94.9 cents for regular, $101.9 for unleaded.
Lundberg said the price of crude oil could drop from $27 a barrel to about $20 over the next few weeks. As a rough gauge, a $1 drop in the barrel price of crude leads to a 1.5-cent drop in the price of a gallon of gasoline at the pump, he said.
Accordingly, retail gas prices could fall as much as 20 cents a gallon before the end of winter, he said.