Gulf Oil CEO Joe Petrowski said yesterday that the price of oil could sink to $20 per barrel, and there is a chance gasoline prices could drop as low as $1 per gallon early next year.
Speaking at a South Shore Chamber of Commerce breakfast at Lombardo's in Randolph, Petrowski said after speculators drove oil prices up, there is a chance that the market will overshoot on the way back down, resulting in much lower prices at the pump.
Gas prices have already sunk fairly rapidly this fall, reaching an state average of $1.85 for a gallon of regular this week, following a plunge in crude prices.
Gulf Oil, which is based in Newton, is not an oil producer. Gulf stopped producing oil in 1986 and stopped refining in 1992. Petrowski describes the company as a "fuel-agnostic" wholesaler, and will sell whichever fuels customers and distributors demand.
Though he said the company benefits from lower energy prices, he said he believes the price of oil should range from $40 to $60 per barrel, depending on economic activity, to keep pace with inflation.
Policy makers should make low-cost energy a goal, he said, by investing in alternative energy sources, increasing domestic oil reserves and diversifying the foreign origins of oil so as to be less dependent on unfriendly countries.
While he said he believes global warming is a danger, Petrowski is not sure there is as much of a correlation between carbon and global warming as some environmentalists claim.
"Carbon is our greatest threat - there's another myth," he said. Economic devastation and reliance on foreign supplies of oil are bigger worries, he said.
Since gas prices peaked in July, Petrowski said some people have resumed driving habits that they avoided when gasoline was $4 a gallon in the summer. But he said he hopes that the motivation to create alternative energy sources will not be lost.
Gulf opened its first E85 ethanol fueling station at Logan Airport in October - just as gasoline prices sank and the demand for ethanol decreased. "Ethanol's not a great business right now, but it will be," Petrowski said.
He said cellulosic ethanol, that made from wood or non-edible parts of plants, will eventually replace corn-based ethanol. He said he also believes the United States should eventually get rid of the import tax on ethanol from places like Brazil.
Petrowski said that New England's energy future is bright, with research and development going on at local universities as well as access to gasoline from refineries in Canada, the mid-Atlantic region, the Caribbean and Europe.
"We're no longer at the end of the pipe," he said.
Julie Onufrak can be reached at jonufrak@ledger.com.
