Price battle in Salem drops costs for fuel to state low

By DON SHILLING

VINDICATOR BUSINESS EDITOR

SALEM — Christmas presents came early for Salem area residents — gasoline prices that appear to be the lowest in the state.

Smith Oil on East State Street posted its lowest price in some time Tuesday — $2.71 a gallon.

“We’re swamped,” said Paula Crum, station manager.

Out-of-towners are among those filling up. Crum has spoken with numerous people from the Youngstown area and Pennsylvania who were driving through town and stopped when they saw the prices.

These people know a good deal when they see one.

Ohiogasprices.com lists Salem as having the lowest prices in the state. The Web site, which uses prices reported by drivers, lists five Salem stations as the only ones in the state to have prices under $2.80.

No other area stations were even close.

MSN Autos, which records credit card transactions at stations, listed prices in Boardman and Austintown Tuesday as ranging from $2.97 to $3.10.

Linda Casey, a spokeswoman for Marathon Petroleum Co., said the reason for the low prices in Salem is simple — a good, old-fashioned price war.

These erupt from time to time when one station lowers its price and other stations follow. Marathon, which operates a Speedway station in Salem, is keeping up with the price-cutting so it doesn’t lose customers, she said. It was charging $2.71 Tuesday.

“We are undoubtedly losing money on every sale,” she said.

Tuesday’s cost for buying gas wholesale was $2.25 a gallon, and it typically takes 65 cents a gallon to cover transportation costs, taxes and station expenses, she said. That means gas would have to be sold at roughly $2.90 a gallon to break even.

Crum said Smith Oil officials have her check other stations’ prices each day, sometimes twice a day, and report them back to the company’s main office in West Virginia. They call her back to tell her where to set prices. Smith corporate officials couldn’t be reached.

Deb Kline, manager of the Circle K on South Lincoln Avenue, said she also relies on corporate officials to set prices. Right now, she’s busy keeping up with the brisk business.

“We’re packed as heck,” she said.

The store normally receives one delivery of gas each day but lately has been receiving two or three truck loads daily.

The station’s price fell under $2.90 two weeks ago and then under $2.80 last week. It stood at $2.72 Tuesday.

How low will they go?

“I don’t know,” Kline said. “We’ll find out.”

It seems like they are headed lower yet, though.

The GetGo station at Giant Eagle in Salem cut its price to $2.69, even though its charging $2.99 in Canfield, about 10 miles away. Murphy USA at Wal-Mart in Salem also dropped its price to $2.69.

There is a way to end a price war, however, Casey said.

“The prices usually go lower until someone says, ‘Uncle. I can’t be giving away gas,’” she said.

shilling@vindy.com