By Independence Day, gasoline prices in the United States could drop a nickel or more a gallon because of the flow of Iraqi oil onto world markets for the first time since the Persian Gulf War.
The federal government predicts that a gallon of gas will eventually drop from 2 to 6 cents at the retail level once Iraq begins exporting oil in about 30 days, said Mark Rodekohr of the federal Energy Information Administration, a division of the Energy Department."Gasoline prices will probably stay up for another four to six weeks, then, after the July Fourth weekend, you may see a slight decline," said Thomas H.L. Curtis, an energy analyst for the Computer Petroleum Corp.
Some analysts think the delivery schedule might be optimistic by a few weeks and, in addition, the dealers may be slow to pass the savings on at the pump.
"It took a long time for the prices to go up, the (profit) margins were squeezed," Curtis said. "They'll try to maintain the margins that they have now, you can bet on it."
Iraq's deal with the United Nations will allow Saddam Hussein to sell $1 billion worth of oil every 90 days so he can buy food and medicine for his people.
Jeff Eshelman, spokesman Independent Petroleum Association of America, called the agreement "a deal with the devil."
"What we're doing here is becoming more dependent on another foreign source of oil and another unstable source at that," he said, noting that the United States imports more than 50 percent of its oil.
Mike Morrissey, a spokesman for the American Automobile As-sociation, said the timing was still good news for summer vacationers.
"Prices were heading down anyway, but this extra oil gives us a bit of insurance that will protect against disruptions in the oil market," he said.