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Motorists clammer to get gasoline for 99 cents at Youngstown station
youngstown station sells fuel for 99 cents per gallon
and Kalea Hall
YOUNGSTOWN
Mahoning Valley motorists got a rare opportunity for a few hours Thursday: to fill their gasoline tanks for a price straight out of 1980, the last time U.S. gas prices averaged less than $1 per gallon.
Motorists lined Youngstown-Poland Road and stretches of Midlothian Boulevard as far as the eye could see for hours Thursday morning after a BP station at 2069 E. Midlothian Blvd. lowered its price to 99 cents per gallon.
Some people in line reported waiting more than an hour to fill up their tanks. One man pulling away from a BP pump excitedly displayed his receipt, yelling out his window, “32 gallons!”
Some took it a little further. One woman got out of her vehicle to yell at a man who she said cut the line. He responded colorfully, with some choice words not fit for publication.
“Some of the people behind me are getting crazy,” said Michelle Oliver, of Youngstown, who after an hour had inched her way close to a pump. “But I think it’s nice what they’re doing.”
The station raised the price on its sign to $1.96 shortly after 2 p.m. Owner Ike Omran cited traffic and safety concerns as the reason.
“It was getting out of control,” he said. “I would have loved to keep it all day long, but it’s impossible.”
Two nearby gas stations – a Valero station connected to a Sami Quick Stop, and Fast Fuel – were selling gasoline for $1.96 per gallon, also below Thursday’s state average of $2.49, according to GasBuddy.com.
Some called it a “gas war,” but Omran – who also owns Fast Fuel – offered a different explanation.
Omran, of Canfield, has operated gas stations in that corridor for 15 years. He recently completed renovations to the BP location, and Thursday’s deal was a way to promote that, he said.
A director at Sami Quick Stop said his store’s price was set at $1.96 before BP dropped its price.
“Oil prices have been going down. This morning, because of the price of oil, we knew we were going to break the $2 barrier,” said Keith Roland. “It has absolutely nothing to do with what’s going on over there [at BP].”
The BP deal also was a way to say thanks, Omran said.
“We are a community business. Everyone knows me. I’ve been here 15 years,” he said. “It’s time to give something back to the people who gave me everything.”
Low oil prices didn’t hurt, either.
“We took advantage of crude oil being below $38 a barrel,” he said. “Due to the low costs on the fuel, we decided to drop gas to 99 cents.”
Despite the low cost of crude oil, however, analysts say gas stations have to charge about $2 per gallon to turn a profit. The price for a barrel of oil was $38.60, according to the U.S. Energy Information Administration.
At press time Thursday, Omran reported he had sold roughly 15,000 gallons so far – on a normal day, he would expect to sell between 3,000 and 4,000. The station had served 1,800 vehicles, with lines still out of control as of 5 p.m.
The last time Mahoning County saw unleaded, regular gas below a dollar was in December 1998 when it was 97 cents a gallon, according to AAA East Central. The U.S. Department of Energy shows the average retail price of gas consistently below $1 a gallon before 1981. In 1987, the average dropped below $1 again and stayed below $1 until 1990.
Patrick DeHaan, Gasbuddy.com’s senior petroleum analyst, was surprised when he heard about the 99 cents a gallon gas in Youngstown.
“That is a very generous owner,” DeHaan said. “He is losing money.”
DeHaan did not think the owner would keep the price that low for long. “I wouldn’t expect it to last more than a day,” he said.
DeHaan also didn’t think other area gas stations would bump the price down that low to compete.
“There is no common sense to why stations would want to lose a dollar a gallon,” he said. “We do see price wars, just not to this extreme.”
Price wars typically feature drops of 25 to 50 cents in price.
Mike Kassem, owner of Morgan Oil at 127 Lowellville Road, didn’t think any other local stations would drop the price that low. Kassem’s gas was $1.99 a gallon for regular, unleaded.
“You cannot afford to lose a dollar a gallon,” Kassem said.
Kassem also believes pricing gas that low would hurt sales inside the store.
“The busier you get on the outside, the less business you have inside,” he said.
For Omran, however, the promotion wasn’t about turning a profit.
“Right now, we are breaking even, and making a little bit of money. Not a lot,” he said. “But in the next week or so, we’ll recover what we put in.”