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Los Angeles
Thursday, Feb 22, 2024



Staff Reporter

Few Angelenos have enjoyed the recent drop in gas prices more than Marc Granovitz, owner of Boulevard Florist Wholesale Flower Market in Lawndale.

Since prices at the pump began falling, Granovitz has seen his gasoline costs, which typically total about $1,800 a month, drop by a third.

“Basically, bottom line, it’s a real benefit,” said Granovitz, whose fleet of eight delivery trucks represents a major part of the shop’s overhead.

But Granovitz, like other local business people whose bottom lines fluctuate with the prices at the pump, said that the unpredictable nature of gas prices has prevented him from taking full advantage of the savings.

“It’ll make about $600 a month for us, but who knows how long it will last?” Granovitz said. “If I could project it, I could say I would have $7,200 a year to pay down loans, or take a vacation, or build the business. But you can’t project it.”

So how long will the low prices last?

Energy analysts say that business owners like Granovitz can expect at least several more weeks of low gas prices, which already have dipped below 90 cents a gallon for unleaded gasoline at some local filling stations.

For that, motorists can thank the government of Venezuela, which last fall ceased abiding by OPEC limits on crude oil exports.

Under OPEC rules, Venezuela is limited to producing 2.5 million barrels of crude oil a day. But the country currently is producing about 3.6 million barrels a day, 42 percent above its quota, flooding the market with crude oil. Venezuela recently slipped past Saudi Arabia as the world’s largest oil supplier to the United States.

“There’s a war going on between Venezuela and the rest of OPEC,” said Rob Carone, executive vice president of Oil and Gas Management Corp., a Santa Barbara-based producer of crude oil.

That conflict, which has been such a boon for consumers, spells trouble for producers like Oil and Gas Management. The company, which supplies oil to Chevron and other refiners, is selling its crude at $9.11 a barrel, close to half of the $18 a barrel it was asking 12 months ago, Carone said.

How long OPEC’s internecine troubles will last is anyone’s guess, Carone noted, making it nearly impossible to predict when prices will stop dropping or start rising again.

“You don’t know how many months that could take,” said Carone. “We have no idea. I wish I had a crystal ball.”

The good times at the gas pump also could be derailed by a change in the recent wet weather.

In particular, L.A.’s gas prices, which traditionally are higher than in other parts of the nation, have been driven down by the recent spate of El Ni & #324;o storms, which made for the wettest February in L.A. in more than 120 years. When the weather is wet, people tend to drive less.

That drop in demand has sparked a price war among L.A.’s filling stations, said Scott Loll, a spokesman for L.A.-based Atlantic Richfield Co., the state’s second-largest seller of gas.

“What you are seeing is competition in the marketplace working its wonders,” Loll said.

“There has been a lot less driving, a lot fewer people on the roads, because of bad weather in February,” added Bob Aldrich, spokesman for the California Energy Commission.

With spring fast approaching, however, that could change. Traditionally, gas prices rise during the warm spring and summer months, because of increased demand from drivers making long car trips.

However long it may last, there is no question that the recent drop in gas prices has been the most significant in recent memory.

Last week, California had a statewide average of $1.18 per gallon for unleaded gasoline, compared to $1.41 a gallon a year ago, according to the U.S. Department of Energy.

And prices in L.A. were even lower. According to the Lundberg Survey, which tracks gas prices nationwide, gasoline prices dipped to an average of 98 cents a gallon in Los Angeles down from $1.29 a year earlier.

Adjusting for inflation, “we are probably lower than we have been in the last 28 years,” Aldrich said.

Nonetheless, thanks to California’s comparatively high taxes on gasoline, prices were even lower elsewhere in the country.

Nationwide, the average price for a gallon of unleaded gasoline was $1.07. And some parts of the nation have seen their average gas prices drop well below 90 cents a gallon. In Atlanta, for example, the average filling station was selling gas for a mere 87 cents a gallon.

The lower gas prices are being enjoyed by such business people as Ernesto Cousin, general manager of United Express Courier, who estimates his business has saved between $3,000 and $4,000 since gas prices have begun falling.

“It’s a tremendous help,” he said. “I just wish they could keep it at one price all the time.”

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