As Memorial Day approaches and the summer travel season heats up, road warriors nationwide are hoping for a break on gas price’s recent surge. And their wish may be coming true: Some experts expect prices at the pump to drop within the next six to 16 days thanks to lower wholesale gas prices.
“We can expect retail gas prices to come down within the coming weeks,” says Troy Green, spokesperson for AAA. “Exactly how much that will be, we don’t know. However, wholesale gasoline right now is trading significantly less than it was earlier this spring, and that bodes well for the summer driving season.”
Wholesale gas currently stands at around $3.06 per gallon and Green says consumers typically pay 60 to 70 cents more than wholesale per gallon once costs for marketing, distribution, tax, transportation and individual station markup are factored in.
Once retail prices begin to reflect wholesale prices, an average nationwide price of $3.66 to $3.76 per gallon is expected, according to Green. Currently, the national average for gasoline stands at $3.98 per gallon, according to the AAA Daily Fuel Gauge Report.
Although Green is confident that prices will ease, he stresses that nothing is certain when dealing with oil or gasoline figures.
“We have seen a seesaw affect with wholesale prices for a while now. There are just too many factors involved to say it’s completely stable. We had the fallout from the Japan earthquake and tsunami, and how many people could have predicted the civil unrest in Libya and Egypt?”
And it’s not just instability overseas that could cause price fluctuations: pending floods in the Mississippi Delta and New Orleans have many analysts are hedging their bets on where prices will fall.
“There are a few issues to deal with over the short term,” says Tom Kloza, chief analyst for the Oil Price Information Service. “There are flood waters heading for a cluster of refineries from Baton Rouge to New Orleans, and at the very least we are looking at run cuts for U.S .refineries, and logistical issues. Honestly, that is the only thing keeping gas prices from really dropping 25 cents or more.”
Assuming the flood waters don’t cause any problems, Kloza says consumers living in the Rocky Mountain or Pacific time zones should expect considerable drops in prices in the next 10 days.
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2 Responses
when I see it, I will believe it!
A significant long term fall in he price of gas requries a fall in the price of crude oil, and that requires either a global recession (reducing demand), massive new discoveries (possible, but the major sources of new oil are likely to be offshore and shale, and the “greens” object to drilling), and most importantly an increase in the value of the dollar (which in the long run requires a major reduction in the US budget deficit and an end to the US printing dollars – so support a “tea party” win if that’s what you want).