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Fill ‘er up: Gas prices dropping

Everyone likes a gift that keeps on giving.

Take cheap gas prices, which are are expected to keep on giving at least through the holidays.

A gradual reduction over the last several months has led to stations in at least one Southern New Hampshire community to drop prices to under $2 a gallon.

Cars were lined up three and four deep at pumps Friday afternoon at Super Petroleum on Nashua Road in Londonderry. That’s where the price for a gallon of regular unleaded gas was only $1.98.

Across the street, Mutual Oil was also drawing hordes of customers eager to fill up at $1.99 a gallon.

Few people could remember exactly how long it’s been since gas was so cheap.

“It must have been over 20 years, over 30 years,” said Lucienne DeMeo, 62, of Derry. “This is great.”

The average price of gas in the state did drop to a low of $2.04 on Feb. 3. But the duration was so short, it’s understandable that many people don’t remember.

Otherwise, prices haven’t been consistently low for an extended period since hitting $1.60 per gallon in January 2009, after rising to $4.04 only five months earlier, according to AAA statistics. Before that, prices had not dropped to as low as $2.04 since March 2005.

DeMeo said she finds herself frequently filling up her Toyota Corolla because she works in Boston.

Like many people at the two Londonderry gas stations, she was laughing and smiling at the prospect of the price tag for filling up.

“I’m going to put it on Facebook that I’m only paying $1.99 for gas,” DeMeo proudly announced.

In related news, gas prices down, could fall below $2 gallon.

Driving forces

The good news is that prices in New Hampshire, Massachusetts and around the country will continue plummeting for months to come, according to Jeff Pelton, senior petroleum analyst for GasBuddy.com.

“We could be seeing prices at a 15-year low,” he said.

The much-welcomed gift of low prices that consumers are now seeing will culminate in an even bigger holiday gift come November and December, when prices should be at least 40 cents lower, he said.

“From everything we see, it’s only going to get better,” Pelton said. “For the next few months through Christmas, we will see gas drop 10 to 40 cents a month. You will see prices around the holidays that are eye popping.”

One of the few factors to alter the major price decrease would be an unanticipated international crisis such as war, he said

Patrick Moody agrees that gas prices should keep dropping sharply. He’s the spokesman for AAA of Northern New England.

“Right now, we are seeing an average around the country of prices about $1.10 to $1.20 less than about this time last year,” he said. “The relatively low prices of oil is a major factor.”

Other factors include the end of the busy summer driving season, when peak demand for gas causes prices to rise, the analysts said. Stations’ annual switch to a less expensive winter blend of fuel also means an average price decrease of about 10 cents, Pelton said.

He also said the controversial agreement recently reached with Iran would lower fuel prices, as well.

“Then you are going to have more oil in the market and it will push prices down even further, Pelton said.

In related news, OPEC sees oil prices returning to $80/barrel by 2020.

Plummeting prices

The average price for a gallon of regular was $2.23 in New Hampshire on Friday and $2.27 in Massachusetts, according to GasBuddy.com.

The $2.23 in the Granite State is five cents lower than a week ago and 27 cents lower than the average price a month ago.

In Massachusetts, $2.27 is $1.17 cheaper than a year ago. The average price is 6 cents less than a week ago and 27 cents less than a month ago.

There are only three states in the nation where the average price for gas is less than $1.99 — Mississippi, Alabama and South Carolina, Moody said.

Super Petroleum, Mutual Oil and Budget Gas in Manchester were the only New Hampshire stations offering gas at less than $2 per gallon Friday. The highest in the state was $2.99 at Francestown Village Store in Francestown, according to GasBuddy.

Numerous Bay State stations offered gas at less than $2, but none are in the Merrimack Valley, where some prices were more than $2.40 per gallon while others were close to $2.15.

Pelton and Moody said U.S. petroleum production is the key reason why prices continue to drop, with the country relying on its own resources instead of oil from the Middle East.

“The domestic oil market is oversupplied,” Moody said.

As far as gasoline prices are concerned, that’s good news for motorists since gas is produced from crude oil.

“Right now, we have a 70-year high of oil reserves in America,” Pelton said. “It’s all really because of North Dakota.”

North Dakota is where the Bakken oil field is located — a major fuel source now being tapped that is expected to provide the country with an abundance of lower-cost oil for years, Pelton said.

Granite State residents filling up at the pumps Friday were skeptical prices would continue to plummet as much as the analysts predicted.

“The prices will shoot back up,” said Jim Topham of Barnstead. “I don’t believe it.”

In related news, Russia for first time acknowledges low oil prices may hit output.

And price wars

Steve Burl, manager of Super Petroleum in Londonderry, said dropping the price to below $2 on Wednesday has been a boon for business that saw the station sell a full tanker load of gas — 10,000 gallons — in a single day Thursday.

That’s close to what he would usually sell over nearly two days. In less than four hours Friday, Super Petroleum, which offers full service, had already sold 4,800 gallons as of 12:45 p.m.

“We’re just out to give customers the best deal we can get,” Burl said. “Everybody is just so happy.”

He looked across the street where Mutual Oil was selling gas for only a penny higher. Meanwhile, another nearby station sold gas for $2.02 a gallon and two others offered it for $2.19.

“We’re playing games here,” Burl said. “As long as the market stays down, we will keep pushing. We see what the neighbors do and we will be very competitive”

At Super Petroleum, customers were flocking to the pumps after hearing about the $1.98 gas through the news and social media, in addition to word of mouth from friends, family and co-workers.

“You made national news today,” Gisele Marquis of Londonderry told Burl as he filled her tank. “We appreciate it. It’s awesome.”

Angela Sibley, 39, of Londonderry said she lives across town and had no reason to gas up on Nashua Road — until she heard about the cheap gas.

“People were posting it on Facebook,” she said. “I never come down here until today.”

At Mutual Oil, manager Gurjit Walia said he was selling 500 gallons an hour.

“It’s been very, very busy,” he said.

Walia spoke of the price war with Super Petroleum, saying he charges slightly more because he offers a better quality of gas.

Customers such as Felicia Ferland, 29, of Derry said she had been coming to the station for 14 years because of the traditionally low prices.

“People are nice here, too,” she said.

While both stations were busy, business was much slower at surrounding stations, including Nashua Road Shell. The station, which has a Dunkin’ Donuts, and Nashua Road Mobil are often busy with customers. The price was $2.19 at both.

The two stations are owned by Aziz Saba, who said he wasn’t overly concerned about customers flocking to the other stations.

Some customers, including Jim Topham and Jose Oliveria of Manchester, said they stopped at Nashua Road Shell to fill up because it happened to be more convenient. The fact gas prices were much lower elsewhere did not deter them.

“It was on the right side of the road,” Topham said.

One reason Oliveria said he stops there is because of the Dunkin’ Donuts.

“It’s convenient,” he said. “(The higher prices) aren’t that big of deal.”

Saba said he cannot afford to lower his gas prices to what the other stations offer. He said he will continue to rely on his stations’ solid reputation

“We have been here 20 years,” he said. “We do our business on customer service, cleanliness and quality. … Let them fight.”

In related news, Oil prices to recover into 2016 – Reuters poll.

This article was written by Doug Ireland from The Eagle-Tribune, North Andover, Mass. and was legally licensed through the NewsCred publisher network.

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