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No Gain, No Pain

gas prices graphic
AP
Gas prices have dropped in the Midwest after skyrocketing last month to more than $2 per gallon. The rise prompted investigations into claims of price fixing, the suspension of gas taxes and even accusations between presidential candidates Al Gore and George W. Bush.

Indiana now has the nation's lowest gas prices and other Midwest states are close behind, the AAA motor club reported Tuesday.

The impact is immediate for motorists who have been waiting a long time for some good news.

"This thing only gets about 10 miles to the gallon," said Scott Taylor, as he gassed up his sport utility vehicle at $1.27 a gallon at a filling station in Indianapolis. "It was killing me, really. It seemed like I was putting $10 into it every time I started it."

In Kalamazoo, Michigan, Michael Arney of CBS Affiliate WKZO-AM reports some folks are driving a little more and taking the bus a little less, now that gasoline is more affordable. "They're loving this," reports Arney. "Absolutely loving the fact that gas prices have dropped over the last couple of weeks, and that it looks like they'll drop more over the next couple of days."

Pain At The Pump
Just how high are gasoline prices? Check out the American Automobile Association's constantly updated chart on gas prices nationwide, or, for a look at prices in your area, check out the AAA's chart on gas prices, state-by-state.
Overall, there was an 8.8 percent rise in gas prices last month, contributing to a sharp increase in consumer inflation, the Labor Department said Tuesday. In the Midwest, pipeline problems were blamed for the summer spike, with the oil industry saying it couldn't deliver enough fuel to keep prices down.

The industry says those problems have been remedied, though the Federal Trade Commission is investigating whether price fixing was involved.

"It's gone from being the high-cost region to being the low-cost region in a matte of several weeks," said Jonathan Cogan, spokesman for the federal Energy Information Administration. "In the most basic sense, it's supply and demand."

The national per-gallon average for regular unleaded Tuesday was $1.58. AAA said gas prices have dropped 30.3 cents per gallon in the Great Lakes region since June and 16.5 cents in the rest of the Midwest.

"I think what you're seeing is just normality being restored to the supply situation here in the Midwest," said Michael Pitts, executive director of the Indiana Petroleum Marketers and Convenience Store Association. "Problems that we had earlier on a couple of key pipelines are taken care of."

Republicans have blamed the high prices on stricter federal pollution rules that took effect this summer in the nation's smoggiest cities and the complications of producing reformulated fuel in the Midwest. They also said the Clinton administration's energy policy thwarts domestic oil production.

Democrats, meanwhile, noted huge campaign contributions to Republicans and Bush from the oil industry, and suggested price fixing was more likely to be responsible for the prices.

Illinois suspended its gas tax in June in response to the prices, which last month averaged $1.98 per gallon for regular unleaded. Prices have plummeted 39 cents since then, to $1.59 per gallon.

Indiana also suspended its 5 percent sales tax on gas and Gov. Frank O'Bannon isn't planning a change anytime soon.

"What do we know about next week, will there be a shortage then?" asked Cheryl Reed, the governor's deputy press secretary. "We don't know. We're looking at this as a long-term effort."

The high prices were making it hard for bank courier Kriz Nuetzman to do his job, as he was spending about $40 a day on gas.

"Now I spend about $20 a day," the Indianapolis man said. "I can actually make some money."

At a gas station in Clayton, Ohio, assistant manager Brenda Barnett had a constant stream of customers paying $1.35 for a gallon of regular, down from $1.69.

"We've been crazy here with the low prices," said Barnett, who lowered the price Friday. "We've had to ask people, 'Please don't pump gas. We need to do a shift change."'

The good news is limited: The West Coast now has the nation's highest gas prices, according to AAA and federal figures. AAA's average price for regular unleaded in California is $1.76 - 10 cents higher than a month ago and 30 cents higher than last year.

"You have no choice but to pay," said Susan Granvill, who was paying $1.69 per gallon at a Chicago station Tuesday. "They've got you over a barrel."

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