Today’s fuel price musings - As prices drop a bit, Rockford remains below most of state
November 3rd, 2009 at 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.
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6 Comments Add your own
1. Arnie Binning | November 3rd, 2009 at 6:19 pm
Gas Sunday was $2.59 a gallon in Utica and LaSalle.
2. Thomas V. Bona | November 3rd, 2009 at 7:03 pm
Arnie - True … the prices quoted above are for metro areas, so smaller towns are going to have lower prices. But compared to other metro areas around the state, the Rockford area is cheaper than most of them.
3. Jon | November 4th, 2009 at 9:23 am
What I found to be strange is that when the prices went up two weekends ago, our gas was just as expensive as the gas I saw when driving in Chicago and parts of Indiana-it was not until I got out of the Chicago metro area (in Indiana) when prices finally fell to be about fifteen cents cheaper per gallon, which then held their level through much of the state of Indiana.
I always thought we had lower sales taxes, etc. than Chicago & Cook County do on gasoline-why did the prices match?
4. max berry | November 4th, 2009 at 3:17 pm
Sorry, but you are mistaken. I go to milwaukee approx. once a week and their prices are the same or lower than Rockford’s. I rarely buy gas in town anymore as I can get it cheaper both north and south of here.
Champaign is 2.57 today, Mattoon is 2.53, Decatur 2.56, Peoria and Springfield are about the same, only 2-4 cents cheaper. chicago is always higher because they have about 11 cents more in tax added to the price.
A little research instead of just reporting industry sources or news handouts would improve the accuracy of the register star quite a bit.
then we could have a newspaper instead of a business shill.
5. Thomas V. Bona | November 4th, 2009 at 5:20 pm
Jon,
You’ll have that some times … price differences between regions aren’t simply a function of taxes. It depends on how much gasoline is going for at the different terminals that serve a region … if Rockford’s terminals have a perceived shortage, for example, prices may be higher. More often than not, Rockford is well below Cook County, though.
Sorry I can’t give you an exact formula, but it’s not an exact science.
6. Thomas V. Bona | November 4th, 2009 at 5:33 pm
Max,
Unless you’re going out and scientifically surveying stations, you have access to the same data I do.
Some points of note:
1. The numbers I cite are for metro area averages - they take into account Belvidere and other cheaper parts of the area. So Rockford city prices will be higher. Because these prices are captured daily from a large sample of stations at the same time, they’re the most reliable snapshot we have. Can parts of the Milwaukee area be cheaper or the same as parts of the Rockford area? Sure, but on average the Rockford area is cheaper right now.
2. Champaign and Decatur are the two metro areas cheaper than ours, according to AAA. I didn’t say we were the lowest, but that we were lower than most of the state’s metro areas. Mattoon is possibly in the Champaign metro area. And while the cities of Springfield and Peoria may have comparable prices to the city of Rockford, on average their metro areas are (slightly) higher.
Just because you don’t like the facts doesn’t make me a shill. Who am I shilling for, anyway? High fuel prices hurt more local businesses than they help … especially as the region tries to be a transportation hub,
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