Today’s fuel price musings - As prices drop a bit, Rockford remains below most of state

6 comments November 3rd, 2009 02:42pm Thomas V. Bona

Gas prices started to ebb a bit over the weekend, after a weird autumn uptick (then again, what’s normal economically this year?). Had a reader chide me for my story a few weeks ago where analysts predicted prices were going to fall, but then they rose. Well, predicting gas prices canoften be a fool’s game. So let’s try again!

Here’s AAA’s take, from manager of regulatory affairs Andrew Delmege:

The ongoing plight of the dollar has been, and will continue to be in the short term, the driving factor behind any major movement in market oil prices. Dollar weakness, which can be loosely defined to mean when the US dollar loses purchasing power or value against a competitor currency like the euro or a basket of currencies, can be caused by a myriad of factors. The major reasons for the current spate of dollar weakness include rapid growth in the national debt, the questionable health of the US financial system and the lingering effects of the recent recession. As the dollar weakens, oil and other commodities become cheaper for foreign investors to buy, which then drives up the market price. Also, oil is a physical good that can be used by investors to protect their portfolios from declines in the dollar’s value.Perhaps what is most surprising to consumers and analysts alike is how crude oil prices have managed to defy traditional supply and demand fundamentals. If one were to take the plight of the US dollar out of the oil price equation entirely, it would be difficult to justify logically why oil prices now hover above $77 per barrel. Huge existing oil supplies and demand for oil and gasoline that is only now slightly improving would likely have been enough to keep prices in the $65-$75 range absent the continued struggles of the dollar.

Here’s the good news, locally. Rockford’s prices are in the middle of the road nationally - 137th of the country’s 280 metro areas. Our prices are lower than most of the metro areas in Illinois, and all of Indiana and Wisconsin. Weird. Just like I can’t explain why we’re well above average, I can’t explain this

Here are the prices from this morning (courtesy of AAA’s fuelgaugereport.com):

Gasoline: Rockford dropped two cents to $2.69 a gallon today, up almost 26 cents in the past month. We’re ninth in the state. The Illinois average dropped a cent to $2.80 a gallon, up 33 cents in the past month. The national average dropped less than a cent to remain at $2.69 a gallon, up almost 23 cents in the past month. Illinois has the seventh-highest gas prices in the nation.

Diesel: Rockford remained at  $2.86 a gallon, up 23 cents in the past month. We have the third-highest diesel prices in the state. The state average dropped a cent to $2.89, a  23-cent increase in the past month. The national average dropped slightly to $2.83, an almost a 21-cent increase in the past month. Illinois has the 14th-highest diesel prices in the country, including the District of Columbia.

Will Southwest Airlines at Milwaukee hurt Rockford?

4 comments November 2nd, 2009 01:39pm Thomas V. Bona

Southwest Airlines started service out of Milwaukee’s Mitchell International Airport Sunday, with 12 daily nonstops to five destinations.

What’s interesting is that three of those destinations - Phoenix, Orlando and Tampa - directly compete with routes out of Chicago Rockford International Airport. Could those routes hurt RFD?

Dane County Regional Airport in Madison seems to think so A spokeswoman said Rockford would be affected more than Madison.

“I think we have loyal passengers here and, secondly, Madison tends to support the business market better and Southwest tends to be more of a leisure destination airline,” said Sharon Wisniewski, spokeswoman for the Dane County Regional Airport.

Not sure I really agree with her logic. Southwest primarily a leisure airline? Perhaps in the past, but it’s been moving aggressively to grab business travels, and the airline claimed last year it had more business travelers than any airline. While only one of its current Milwaukee routes competes with a Madison route (Milwaukee-Baltimore vs. Madison-DC), eventually it could add more competing routes to New York, Denver, Dallas, St. Louis … several low-hanging fruit on Madison’s tree. Add to that the “Southwest effect” of lowering fares … with AirTran’s ramp up in Milwaukee, too, that airport is going see some real deals that will nab passengers. I don’t think Madison is so safe.

But what about Rockford? Airport Executive Director Bob O’Brien’s oft-stated goal is to create “Midway 2, northwest of O’Hare.” But with Southwest and AirTran - two airlines O’Brien has targeted - Milwaukee seems to have beaten them to the punch. Can Rockford become “Midway 3″?

Personally, I’ll check out Southwest whenever going to a city they fly to out of Milwaukee, but if it’s a choice between MKE and RFD, I’ll stay here if the price is even remotely close. What about you? Going to feel the LUV?

Do you care what kind of plane you fly on?

5 comments October 21st, 2009 01:29pm Thomas V. Bona

Just wrote a story about the turbulent first year of Direct Air at Chicago Rockford International Airport, and their hopeful plans for the future.

One big change is the type of airplane they use here. When they started service from Rockford to Punta Gorda, Fla., they used these planes:

“Like walking into a nightclub”

This time, they’ll be using these planes:

Like walking into an airplane

(more…)

Today’s fuel price musings - Gas prices still lower than most of the state

Add comment October 16th, 2009 02:58pm Thomas V. Bona

Haven’t done this in a while, but some interesting stuff out there. Gasoline prices nationally are in a slight uptick because of a drop in supply, as refiners aren’t seeing margins high enough to make it worth the effort.

Just discovered the GasBuddy Blog, and Patrick had some interesting thoughts yesterday:

To stop oil prices from a sustained rally we need a few things:
1) A stronger U.S. dollar
2) An acceptable profit margin for refiners to encourage production
3) Goldman Sachs to refrain from “investing” billions of dollars into oil
4) Traders who look at numbers vs. last year. Oil inventories are still extremely healthy and things aren’t improving as fast as some believe

Gasoline prices are still well cheaper than they were a year ago, but that will change by year’s end. While 2008 saw prices fall off a cliff, 2009 will just see some ebbing.

Here are the prices from this morning (courtesy of AAA’s fuelgaugereport.com):

Gasoline: Rockford rose two cents to $2.52 a gallon today, up almost six cents in the past week but down a cent in the past month and down 61 cents in the past year. We’re ninth in the state and tied at 102nd of the country’s 280 metro area. The Illinois average rose almost three cents to $2.58 a gallon, up eight cents in the past week and one cent in the past month, but down 66 cents in the past year. The national average rost more than a cent to $2.50 a gallon, up three cents in the past week, but down almost six cents in the past month and down 58 cents in the past year. Illinois has the 11th-highest gas prices in the nation, including the District of Columbia.

Diesel: Rockford rose a cent to $2.66 a gallon, up more than three cents in the past week, but down almost two cents in the past month and down but almost $1.06 in the past year. We have the third-highest diesel prices in the state. The state average rose a cent to $2.69, a three-cent increase in the past week, but a slight drop in the past month and a $1.19 drop in the past year. The national average rose a cent to $2.65, a three-cent increase in the past week, but a one-cent drop in the past month and a $1.11 drop in the past year. Illinois is tied with the 19th-highest diesel prices in the country, including the District of Columbia.

Link: 10 Things Gas Stations Won’t Tell You

Add comment October 16th, 2009 10:25am Thomas V. Bona

Found a great article this week while researching my Road Ranger story.

It’s called “10 Things Gas Stations Won’t Tell You” and is pretty enlightening on some issues of pricing, gasoline quality, credit cards and the price of soda vs. coffee.

My favorite is “I hate it when gas prices are going up”:

Stations earn on average between 10 and 15 cents on a gallon?of?gas. Ironically, they earn the least when prices are highest. When fuel climbs, gas stations must shrink their profit margin to remain competitive, meaning they earn less per gallon than usual. But another big cost during tough times is something they can’t do anything about—credit?card?fees, which add up to about 2.5 percent of all purchases. When gas is at, say, $2 a gallon, the station pays credit?card?companies 5 cents a gallon; when gas hits $3, that fee becomes 7.5 cents—more than half the station’s entire average profit. “Those credit card fees are miserable for the gas station business,” says Mohsen Arabshahi, who owns five Southern California gas stations.

How do station?owners make up for lost revenue? “Prices go up like a rocket and come down like a feather,” says Richard Gilbert, a professor of economics at UC?Berkeley. For several weeks after wholesale prices drop, stations can earn as much as 20 cents a gallon before retail prices are lowered to reflect the change.

What catches your eye?

How do you choose what gas station to use?

7 comments October 15th, 2009 04:02pm Thomas V. Bona

Just wrote about Road Ranger’s use of self-supplied gasoline as opposed to linking with Citgo or BP or Mobil.

Jeff Lenard of the National Association of Convenience Stores made some good points:

But brand loyalty isn’t what it used to be, Lenard added, because people shop based on price, convenience and experience. Gas stations differentiate themselves on service rather than the sign out front.

“If they like your store, they’re going to like your gas,” he said. “If they like the customer service, if they like the food offerings, if they like the cleanliness of your store, they’re going to trust you sell good fuel.”

For me, I choose a gas station based mainly where I am when I need gas. I’m the kind of customer that must drive them wild - no loyalty whatsoever. Today, I went to Road Ranger because it was on my route and because I like their coffee … at least compared with the other nearby option. But I’ll go a variety of gas stations depending on the time. What’s inside usually doesn’t matter because I try not to buy much inside … I get my gas, use my card and go.

Road Ranger’s “Top Tier” detergent gasoline is interesting, mainly because Honda is one of the automakers behind Top Tier and I drive a Honda Fit. But my owners manual doesn’t say anything about using specifically that kind of gas … I’ll ask my mechanic but I suspect my patterns won’t change unless he says “Oh heavens yes, use Top Tier”.

What drives your gas station decision? Do you have any brand loyalty?

Reader question: Why widen U.S. 20 before more of I-90?

2 comments October 15th, 2009 03:03pm Thomas V. Bona

Passenger Seat regular Sally Hanks asked a good question that deserved its own post.

Speaking of freeways: Although I would welcome the widening of U.S. 20 from I-39 to IL-2, I question the prioritization. If they come up with an assesment that says it needs it, and/or the funds are available, why don’t they direct those funds to widen I-90 between Elgin and Rockford? No assesment needed there!

Thanks for the question. A few things:

1. Remember, I-90 between Elgin and Rockford is the Illinois Tollway, so all widening projects there are paid for by tolls not by state construction funds. By statute, IDOT can’t send its money, which comes from fuel taxes, registration fees and other funds, to tollway projects.
2. Even if they could, Elgin to Rockford is much farther than the U.S. 20 project. They couldn’t get very far in that widening if they put this money to it.
3. It’s not that the assessment is to determine if the project is needed - they’ve already determined it is - it’s the necessary environmental study to see what alignment the road should be in, and whether widening can be done without too many negative impacts.
4. Actually, from a pure numbers point of view, the 20 project does pretty well vs. the tollway. First of all, there’s a separate project to widen the bypass between the Cherry Valley interchange and where I-39 heads south. That presumably is a higher priority, and would cause a bit of a choke point on U.S. 20 if more of the bypass isn’t widened. Also, while traffic on the bypass is less the Tollway, it’s not tons less. The portion where U.S. 20 and I-39 share actually has higher traffic than the tollway does for a good chunk of the Elgin-Rockford stretch; while the rest of the bypass  to be widened has perhaps 5 to 25 percent less traffic, according to Getting Around Illinois.

But I think point number 1 is the biggest key. Thanks for the question!

Avoid downtown Chicago expressways

2 comments October 14th, 2009 02:18pm Thomas V. Bona

A “pavement failure” on the outbound Kennedy Expressway near The Loop has caused all sorts of havoc with traffic downtown, several news outlets are reporting. Apparently, a contractor was filling up an underground tunnel with concrete and used too much pressure, causing the pavement to break above. The Kennedy will be reduced to one lane outbound for a few days, and state officials advise motorists to avoid downtown expressways for the next 24 hours.

Hopefully it turns out to just be human error, and not existing problems with the pavement. You always hate for pavement to *fail* but better for it to be because of external, preventable reasons  than it just collapsing because it was in bad shape.

Peotone proponents want to nab cargo too

8 comments September 11th, 2009 11:54am Thomas V. Bona

So not only do backers of the “South Suburban Airport” want it to be Chicago’s third major passenger airport, they also want it to be the third major cargo airport (or fourth, depending on if you count Milwaukee):

The state and county plan to develop a cargo airport as part of an ambitious multimodal transport complex that will include up to four intermodal rail yards, access to three interstate highways, and up to 135 million square feet of industrial warehousing and distribution space, 20 percent of which currently sits vacant due to the economic downturn.

There is one major obstacle, however: One of the world’s most established cargo airports, O’Hare International, sits only 40 miles away.

State and county officials seem unfazed. As they see it, the “South Suburban Airport” will offer a compelling alternative to O’Hare, with its lower airline landing fees, less-congested airside and landside operations, and convenient connections to Interstates 55, 57, and 65 as well as to intermodal rail services. “Our point of distribution is more friendly than O’Hare’s,” says John Grueling, president and CEO of the Will County Center for Economic Development.

Rockford is mentioned as an example of how the area could support multiple cargo airports. There’s been much talk about whether a Peotone airport would hurt Rockford’s efforts to draw more passenger traffic, but cargo seems to be a bigger threat. Passengers from downtown Chicago and the south suburbs aren’t going to do much driving to Rockford, and those in the northwest burbs aren’t going to Peotone. But cargo operations looking to serve Chicagoland or the Midwest in general don’t care where they are in the region as long as they’re near interstates and rail.

Will County’s push to become a bigger and bigger logistics hub - Chuck Sweeny notes that Union Pacific is building yet another intermodal facility there - might have an effect on Rockford’s push to do the same. Or maybe not … Chicago is pretty big and could use a few logistics centers. But the airport could be an interesting wrinkle…

More from the world’s funniest storage facility

Add comment September 8th, 2009 03:21pm Thomas V. Bona

Last year, I told you about Toby Jones and his unique way of handling your storage needs. Well, he’s got a new, also hilarious commercial (nope, the business is still not real, and it’s still not entiiiiirely work safe):