For the fourth straight week, the nation’s average gas price has fallen, declining 13 cents from a week ago to $4.68 per gallon Monday, according to AAA. In Ohio, prices were down to $4.57, a 17-cent drop from a week ago.
Average gasoline prices in Dayton have fallen 18 cents per gallon in the last week, averaging $4.58 a gallon Monday, statistics show. Springfield dropped 12 cents to $4.65 and Cincinnati fell by 13 cents to $4.74.
Double-digit declines like Dayton’s mark “a pretty tremendous drop,” De Haan said. The trend of falling prices could stretch to a fifth week depending on what happens to the price of oil, with the oil markets being “volatile as heck” last week, falling 10%, then jumping 5%,” he said.
“It’s truly hard to make heads or tails, I think, for anyone, where oil prices may be headed,” he said. “I’m hopeful that we could see another drop this week, but I’m also a little worried that some of the stations in Dayton have dropped to (as low as) $4.25 a gallon.”
If area stations go as much as 15 cents lower than that, some of them will be below cost, “and that’s usually what triggers a price cycle,” De Haan said.
A price-cycling pattern is where stations ignore minor fluctuations in the market on a daily basis, with most stations undercutting each other by a penny or two each day until they run out of margin, De Haan has said. But when a retailer is no longer making any money, they will then raise their price 25 to 40 cents a gallon to pass along any price difference and to restore their margin to about 15 to 20 cents a gallon, he said.
On Monday afternoon, Gas Buddy’s daytongasprices.com website showed more than a half-dozen stations in the $4.25 range, while a few in Beavercreek, Enon and northwest Dayton were still around $4.99.
That wide gap comes down to decisions made by individual stations, De Haan said.
“Some stations are more aggressive lowering prices and other want to make up the margin,” he said. “When prices plummet like they have for the last month, stations have much more control over what they want to charge. When the trend is lower, they can either pass along the price decrease more aggressively or they can sit on it and make more money.”
Credit: Jim Noelker
Credit: Jim Noelker
The national average tied for its second-largest single-day drop in the last decade on Friday, De Haan said. Average gas prices are down nearly 40 cents, with Americans shelling out $140 million less on gasoline every day than they did a month ago, he said.
The nation’s largest weekly price decreases included Texas (-18 cents), Ohio and Illinois (-17 cents), California (-16 cents), and multiple states at -15 cents, including Indiana and Kentucky, according to AAA
Gas demand increased from 8.92 million barrels to 9.41 million barrels ahead of the Independence Day holiday, while total domestic gas stocks decreased by 2.5 million barrels. Typically, those supply/demand trends would put upward pressure on pump prices, AAA said. However, falling oil prices have contributed to lower pump prices.
“What our analysts are telling us is that any decrease in the price of oil, you’re going to have gas prices falling too,” said AAA Club Alliance spokeswoman Kara Hitchens. “Usually what we see is ... they shoot up like a rocket and float down like a feather.”
Falling prices at the pump are good news for motorists, but how long will those lower prices last?
“I don’t think anybody can predict that,” Hitchens said. “Anything can impact that. So far we have not had any kind of hurricane activity in the Gulf (of Mexico), which clearly impacts that. By this time last year, I think we probably had a couple of hurricanes.”
About the Author
