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LOW DEMAND KEEPS GASOLINE PRICES AT DEPRESSED LEVELS

Lower-than-expected demand for gasoline, coupled with high oil inventories, have helped to push down pump prices to their lowest inflation-adjusted levels in history.

Industry experts expect the trend to continue through Labor Day as a glut of crude oil continues to keep prices down in a season that typically sees higher fuel prices.

While figures from the AAA National Fuel Gauge report will not be released until Tuesday, local AAA spokesperson Carolyn Harding said gasoline prices have been about 20 cents per gallon lower this summer than a year ago.

"This has been a very atypical summer," she said. "During the travel season that stretches from Memorial Day through Labor Day, we usually see gasoline prices increase. But it hasn't happened this year. And for the next few weeks, we could see prices drop a little more."

A number of local service stations have dropped prices below $1 a gallon on unleaded regular, including two businesses on Pine Avenue in Niagara Falls. Nick's Sunoco is selling regular unleaded for 98 cents and owner Joseph Sansalone said the glut of crude oil isn't the only factor that is driving down prices in Niagara Falls.

"We've always relied on Canadian trade and we're feeling the crunch now that the Canadian dollar is so low. We're trying to maintain our base and that's one of the reasons that we've gone below $1," he said.

Not far away on Pine Avenue, a worker ar Bruno's Mobil station said prices recently dropped to 98.9 cents for a gallon of regular unleaded. He concurred that the falling Canadian dollar has had an impact on sales, estimating that the station has lost at least 15 percent of its Canadian trade in recent months.

Even though gasoline remains more expensive across the border, Niagara Falls businessmen said the lower Canadian dollar makes it less attractive for Canadian motorists to cope with bridge traffic and tolls to come to the U.S. for fill-ups.

Sansalone also operates two gas stations in Erie County where regular unleaded is selling for $1.07 per gallon, the current average price in Western New York. That's 26 cents lower than the state average that was logged last year. Pump prices in Erie County are typically a little higher than in Niagara County where the sales tax is a penny lower.

Ms. Harding said motorists have not been been logging as many miles this summer as the experts had forecasted.

"There has been lower demand throughout the country, which is contrary to all of the predictions that travel would increase. We thought we would see more people on the road, especially with gas prices so low," Ms. Harding said.

She added that demand should increase over the Labor Day weekend, but it is unlikely to have a significant affect on pump prices.

In July, the statewide average price for a gallon of regular unleaded gasoline was $1.13, down a penny from June's average price. In 1997, the statewide average was $1.29.

Gasoline prices in New York state tend to be 3 cents to 6 cents higher per gallon than the national average. Ms. Harding said state taxes are contributing factors to the higher prices.

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