Today’s fuel price musings - How many ways can you say “Prices are dropping”?
December 3rd, 2008 at 01:51pm Thomas V. Bona
I haven’t done one of these in a while because the news has been the same - prices dropping. Yesterday, though, they ticked up a fraction of a cent in the Rockford metro area … but have dropped back down again. Most stations in Rockford are now in the $1.70s on gasoline. Back when we hit $2, Road Ranger President Dan Arnold suggested they could fall another 30 to 40 cents. So the bottom may be in sight…
Prices courtesy of AAA’s fuelgaugereport.com:
Gasoline: Rockford dropped two cents to $1.81 a gallon. We have the third-highest gas prices in the state. We’re also 84th of the nation’s 250 metro areas. The Illinois average dropped half a cent to $1.77. The national average dropped almost a cent to $1.80. Illinois has the 27th-highest gas prices in the nation, including the District of Columbia. Only Alaska, New York and Hawaii remain above $2 a gallon.
Diesel: Rockford dropped more than a cent to $2.80 a gallon. We have the third-highest diesel prices in the state. The state average rose a fraction of a cent to $2.84. The national average dropped half a cent to $2.74. Illinois has the 13th-highest diesel prices in the country. Only Alaska, Connecticut, the District of Colombia, Hawaii and New York remain above $3 a gallon (Hawaii is still above $4).
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7 Comments Add your own
1. DeanWinchester | December 3rd, 2008 at 3:37 pm
Well down in central IL this last weekend, the highest price of gas was $1.52, most were at $1.50 - $1.47 a gallon. Some places were even lower with a minimum gallon purchase. Head up to Rockton, and the prices were around $1.65 a gallon. yet in good old Rockford the prices remained in the $1.90 a gallon range, with some stations not even that low. the price of gas in Chicago right now is $1.79. what\’s the explanation? What are the reasons? Why should ANYONE who lives in the winnebago county/surrounding area even think of coming into Rockford???????
2. Thomas V. Bona | December 3rd, 2008 at 3:58 pm
Well, you’re kind of cherry picking here, comparing prices from different time frames. According to Illinoisgasprices.com and Chicagogasprices.com, the numbers are a bit different:
The prevailing price in Rockford is $1.79, with some below and some above.
Many stations in Chicago are now at $1.79 themselves, but more are higher (and a surprising number are still selling gas for more than $2 a gallon.
There’s a random station downstate selling gas at $1.49, but the lowest tend to be in the $1.50s. But Springfield, for example is running around $1.78 a gallon, so it’s not fair to suggest that all of downstate is significantly less than Rockford.
Rockton and South Beloit tend to have lower prices because they’re competing with the even cheaper Wisconsin stations (lower gas tax up there).
As I’ve said before, the reasons for regional differences in prices are distribution costs, cost of doing business, taxes, and competition. Maybe there are price wars in those areas, as retailers cut margins to keep volume up. It’s a complicated process.
Why would you buy in Rockford? Convenience. Remember, for every penny difference, it’s only a 12-15 cent difference in a full tank. Even if there’s a dime difference between Rockford and somewhere outside the city, you’re not saving $2 … and that’s before you take into account the cost of driving there and back.
If the prices in Rockford were out of whack, they’d lose significant sales and be forced to lower prices. But not enough people feel prices are bad enough to shop elsewhere. This is the free market system - they charge what they think they can get, taking into account their costs and a reasonable - yes reasonable - rate of return. This is how it works in every other consumer good.
If gas stations systematically overcharge vs. surrounding areas, they’d lose business. If they undercharge, they go out of business. Their goal is to find the balance, not to gouge you. If you don’t like the prices, you’re free to buy less or get it elsewhere.
3. dave | December 3rd, 2008 at 8:17 pm
Wrong, check gasbuddy, Chicago prices are 1.49 1.59. Springfield 1.49. Saying the gas suppliers charge more near Chicago is not true look at the Gas Temp chart, you will see that here in Winnebago County, we are a island of higher priced gas.
Ripped off by taxes, property taxes and gas prices. Rockford with its high crime rate, is getting a really bad reputation. Paying our teachers these high salaries and retirements and a 45% graduation rate. Nighly gunshots heard, and gangsters running around, great city, well worth our added expense to live here.
4. bob unknown | December 4th, 2008 at 7:02 am
well look at it this way when you live in a town where 2 people control the major market what can you do road ranger and kelly williamson rule this part and nothing you can do how do you think dan arnold went from 1 station to none and back to where he is now wasnt being cheap also diesel why so high it is made from left overs it should be cheaper then gas but yet they want there money no matter what i travel all around wi and il and ya rockford is the highest cant blame all on taxes but some yes it still up to the owners like in loves park on forest hills and harlem how many of you no that road ranger eally owns both of the stations there lol not many i bet but there ya go greed and money rockford is goin down till we get a good mayor and do it right
5. DeanWinchester | December 4th, 2008 at 8:42 am
Mr. Bona,
You can paint rockford to be perfectly normal but the realities still exist. the fact is that less and less people are buying much of anything in rockford, extremely high tax rates, and costs for goods and services are moving people out of the city limits and giving an excuse for the people who used to travel into rockford a reason to stay away. I was not using “different time frames” in my original comment, when gas prices in Decatur were $1.50 a gallon (not some random station, ALL stations) ,they were $1.90 or higher in rockford. this has nothing to do with “cost of doing business” it has everything to do with the willingness and ability to rape the rockford citizen and consumer. when people like yourself jump to help “explain” the reasons for such outrageous prices then that justifies and extends the ability for these businesses to continue draining the citizens wallets. We are all seeing the effects of the this generations spin on the “free market system”, our economy is absolutely in the dumps, unemployment is out of control, and the markets crash every other day, don’t you think that POSSIBLY its time to STOP GOUGING the consumers??? at the very least stop giving them excuses for continuing their practices!
6. Art | December 4th, 2008 at 10:05 am
I live close enough to the state line, that I try to shop in Beloit if possible. Rockford and Winnebago County seem to want to emulate Chicago and Cook County as far as taxes go.
7. Thomas V. Bona | December 4th, 2008 at 1:14 pm
Dave,
I checked last night, but couldn’t log in from home to post. I found prices in Chicago on gasbuddy.com running as much as the $1.90s and $2.00 range in the city. I didn’t see any prices in the city itself as low as you cite. Generally, the lowest they got was around where we’re at. And the temperature map had Chicago the “hottest”, and the Rockford area in line with the rest of the region.
I’m looking at the temperature map right now at the ZIP Code level, and Rockford is orange, just like a lot of other pockets of the state (basically the population centers - Springfield, Peoria, Champaign, etc). Chicago city is red.
Are we looking at different maps? Yes, Rockford costs more than its immediate neighbors, but so do all the other cities in the state.
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