PORTLAND — Two gas stations in the York County town of Waterboro are the first in the state to sell regular gasoline for less than $2 per gallon, a level last seen in 2009.
The dip in Waterboro is sudden for Maine, where the average price of a regular gallon dipped to $2.26 on Sunday, falling another 7.8 cents from one week prior. Nationally, the average price fell 5.4 cents in the last week, to $2.12 per gallon.
Dan Sylvestre, owner of Town Line Deli, said the dip to $1.99 is “probably a little early,” but that he was eager to get below $2 in hopes of drawing more attention to the gas station and store he opened about a year and a half ago.
“We sell a lot of pizza and baked goods and there are a lot of people who will pull in for the $1.99, see we have food, too, and then hopefully become loyal customers,” Sylvestre said.
Sylvestre said he expected at least a couple other nearby stations to follow suit, but Lakeside Market was the only one to join in as of Monday by lowering the price of a gallon of regular to $1.99.
A peculiar blend of global and local competition drove the Waterboro stations’ prices below $2, with local decision-making fueling the last push.
Sandi Binette, who co-owns the Lakeside Market Gulf station in Waterboro with her husband, Leo, said Town Line set the price at $1.99 last week after a third competitor went from about $2.18 to $2.09 per gallon. Then, Binette said, they saw Town Line set its price down another 10 cents, at $1.99.
The stations are about 2½ miles apart from each other, and Binette said they compete with two other nearby stations that regularly broadcast their prices on Facebook.
Binette said that drop to below $1.99 leaves a tight profit margin.
“(Town Line) is the one who set that price,” said Sandi Binette. “We’re not hitting the margins that we need to, but competition is competition, so let’s let the games begin.”
The next-lowest prices in the state, according to pricing site GasBuddy.com, are $2.05 per gallon at a station in Kittery and $2.06 at a station in Hollis.
Binette said she and her husband watch the local competition closely, a practice mixed with looking at the daily trading of crude oil on the global market. The price they set every day at 6 p.m. is a balancing act of those local and global markets.
“It’s a constant battle,” Binette said. “You have to be knowledgeable and worldly and in touch with not just what’s happening in our town. It’s a pretty stressful business and not for the faint of heart.”
The owner of Town Line was not immediately available for comment Monday.
The statewide average gasoline price has fallen below $2 in a number of other states closer to crude oil import locations and domestic sources. Brent crude oil futures dipped below $48 Monday for the first time since 2009, with bank Goldman Sachs forecasting a price of $50.40 for 2015.
Reuters reported that analyst Carsten Fritsch of Commerzbank said he expects some cuts in output to start affecting prices in the middle of the year.
Patrick DeHaan, a senior petroleum analyst with GasBuddy, said in a statement Monday that crude oil prices in some parts of the country have fallen to the $30-per-barrel range, which he called the “danger zone.”
“(It’s) territory where oil companies are starting to cut back on operations — a zone that could ultimately result in a slingshot back in prices down the road,” DeHaan said.
Binette said she thinks global crude oil prices will continue to decline in the short term, but that the eventual rise in prices could hit some stations hard as they’re forced to absorb the additional costs before they are able to reverse prices, backing out from the decline going on now.
“It’s gone down so quickly that even some experienced businesses aren’t going to be ready for the up,” Binette said.
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