Today’s fuel price musings - Oil backs down

August 4th, 2008 at 02:58pm Thomas V. Bona

Oil has dropped $4 today, down to around $121 a barrel, as Tropical Storm Edouard decides not to mess with the Gulf Coast.

The AP story makes a spurious point, noting that, “Gas has fallen 5.6 percent since hitting an-all time high above $4 a gallon on July 17, but so far hasn’t kept up with oil’s steep descent, suggesting struggling filling stations are still saddled with gas bought when crude prices were higher.”

Or, you know, suggesting that filling stations took a hit when prices were higher and are now catching up so they can have a decent profit. It’s never as simple as “how much they paid for product directly corresponds to how much they charge.” They have to look at the big picture and adjust prices so at the end of the year they made a decent margin.

You never hear people say “Oil prices are still 73 percent higher than they were a year ago, but gasoline prices are only 33 to 36 percent higher.” What am I missing here.

Here are the prices, at least as of this morning (courtesy of AAAs fuelgaugereport.com).

Gasoline: Rockford dropped a fraction of a cent to remain at $3.91 a gallon. We’re up to fourth in the state in gas prices. The Illinois average remained at $3.98. The national average dropped almost a cent to $3.88. Illinois has the 13th-highest gas prices in the nation (including the District of Columbia).

Diesel: Rockford  dropped almost eight cents to $4.53 a gallon, down 25 cents in the past month. We have the eighth-highest diesel prices in the state. The state average dropped two cents to $4.66, down 15 cents in the past month. The national average dropped a cent to $4.65, down 13 cents in the past month. Illinois has the 22nd-highest prices in the country (including the District of Columbia).

Entry Filed under: Fuel price musings