Today’s fuel price musings - It coulda been worse

September 15th, 2008 at 06:30pm Thomas V. Bona

Gas prices spiked up here this weekend, as they did all over the Midwest (and down to the Gulf Coast). Wholesale prices - the price the retailers pay to get the stuff - ran over $4 a gallon up here, meaning under a normal markup we could have seen prices close to $5 a gallon. We didn’t, as in some cases the suppliers ate the cost while in others the retailer did. It seems like all sides know this will be a short-term supply problem, and decided not to pass all the increase on. I would say it’s good PR for the oil companies and retailers, but they’re getting blasted just for increasing prices like they did.

With oil prices falling and gasoline futures dropping as well, I predict prices will be back down to $3.40 or less in a month. Some local retailers think it’ll go further, to about $3.20 or less. Knock on wood, and hope another hurricane doesn’t hit.

Here’s what the price situation for the metro area, state and nation were as of this morning (prices courtesy of AAAs fuelgaugereport.com):

Gasoline: Rockford increased more than 15 cents to $4.17 a gallon. We have the second-highest gas prices in the state. The Illinois average rose eight cents to $4.16. The national average rose five cents to $3.84. Illinois has the fifth-highest gas prices in the nation.

Diesel: The diesel supply chain hasn’t been hit hard, apparently, as prices there are stable. Rockford dropped almost two cents to $4.09 a gallon. We have the seventh- or eigth-highest diesel prices in the state (No report from Quincy). The state average dropped a fraction of a cent to $4.29. The national average dropped slightly to $4.19. Illinois the 11th-highest prices in the country (including the District of Columbia).

Entry Filed under: Fuel price musings