Posts filed under 'Fuel price musings'
June 25th, 2009
Gas prices dropped again today in the Rockford area, and are down 19 cents a gallon from June 9’s peak. I’m sure everyone would prefer sub-$2 gas, but this sure beats the $3 gas we were staring at earlier this month. Meanwhile, diesel prices stood still, which is a relative relief.
Here are the prices from this morning (courtesy of AAA’s fuelgaugereport.com):
Gasoline: Rockford dropped two cents to $2.74 a gallon today, an almost-10-cent drop in the past week. We’re third in the state and 71st of the nation’s 280 metro areas. The Illinois average dropped almost two cents to $2.79 a gallon. The national average dropped a cent to $2.67 a gallon. Illinois has the eighth-highest gas prices in the nation, including the District of Columbia
Diesel: Rockford stayed at $2.70 a gallon, an four-cent increase in the past week. We have the second-highest diesel prices in the state. The state average stayed at $2.69. The national average remained at $2.63. Illinois has the 13th-highest diesel prices in the country, including the District of Columbia.
January 16th, 2009
Prices have stabilized in Rockford in the $1.90s, while the rest of the nation rises. We’re a bit closer to the national average and we’re falling in the ranking of metro areas. Barring an oil spike, I expect that trend to continue.
Here are the prices (courtesy of AAA’s fuelgaugereport.com):
Gasoline: Rockford rose a fraction of a cent to remain at $1.92 a gallon. We’ve fallen to sixth in the state and are tied as 67th-highest of the nation’s 280 metro areas. The Illinois average rose more than a cent to $1.96. The national average rose almost two cents to $1.82. Illinois is tied with the sixth-highest gas prices in the nation, including the District of Columbia. Alaska, California and Hawaii average more than $2 a gallon.
Diesel: Rockford rose more than three cents to $2.46 a gallon. We have the fifth-highest diesel prices in the state. The state average rose a cent to $2.55. The national average remained at $2.43. Illinois has the 15th-highest diesel prices in the country. Only Alaska and Hawaii remain above $3 a gallon.
January 16th, 2009
Two good explainers on this:
“It’s essential that the people who make the petroleum products earn a rate of return on their capital. Otherwise, they’re going to go bankrupt and they’re going to close.”
- From the Associated Press: Both the refiners and gas stations face a delicate balancing act - keep prices high enough to make money, but low enough to remain competitive.
Quinn Cassidy, an independent gasoline retailer in Slidell, La., said his profit margin on a gallon of gasoline has improved significantly since the summer, when he and others sometimes made pennies per gallon. Now, because of crude’s descent, he says he can make 25 cents to 30 cents a gallon — and he makes no apologies for trying to keep the price as high as possible while remaining competitive.
“Why isn’t it OK for me to make money?” Cassidy said.
It’s easier to make money when prices are coming down (conversely, it’s harder to make money - and easier to lose it - when prices go up). Analysts call it the “rocket and feather”, and some people think that’s some evil plan by the oil industry to gouge. But, to the extent it exists, it’s because they’ll balancing lower profits when crude soars with higher profits when it falls … the average being a reasonable “hey let’s stay in business” level.
Both these articles underscore how complicated a process energy pricing is. It’s not simply, “Oil goes up, gas goes up the same percentage; oil goes down, gas goes down the same percentage.” There are lots of steps, lots of moving parts, and no easy answers. I know that’s what frustrates readers the most - it’s hard ot understand why prices do what they do, and it seems unpredictable and capricious. Also, unlike other consumer goods, the price is in big signs out on the street.
I find the quote from Consumer Watchdog research durector Judy Dugan interesting:
“The refinery cutbacks are for purely financial reasons,” she said. “Now is the time for government to insert sharper oversight and regulatory controls of the refining industry.”
Funny how it wasn’t time to do that when the refiners were losing money (Check out the negative number in November here. Should the government also take steps to provide minimum returns for refiners? It seems like everyone is for the free market until it hurts them…
January 14th, 2009
A very slight drop in gas prices, but nothing to write home about. We also fell a tad relative to the rest of the country, but again, not a very notable level.
Here are the prices (courtesy of AAA’s fuelgaugereport.com):
Gasoline: Rockford dropped a cent to $1.92 a gallon. We have the third-highest gas prices in the state, behind Chicago and Quad Cities. We’re tied as the 56th-highest of the nation’s 280 metro areas. The Illinois average dropped a fraction of a cent to remain at $1.93. The national average remained at $1.79. Illinois has the seventh-highest gas prices in the nation, including the District of Columbia. Alaska, California and Hawaii average more than $2 a gallon.
Diesel: Rockford dropped a fraction of a cent to remain at $2.40 a gallon. We have the sixth-highest diesel prices in the state. The state average dropped a fraction of a cent to remain at $2.55. The national average rose a fraction of a cent to remain at $2.43. Illinois has the 14th-highest diesel prices in the country. Only Alaska and Hawaii remain above $3 a gallon.
January 7th, 2009
…because we went down faster. That’s the reason one of my industry sources cited, and looking at the data it makes sense. Check out this chart from Illinoisgasprices.com:
You’ll see how, for much of November and December, Illinois’ average was around or below the national average, even though generally it’s a bit above the average (because of taxes, distribution and business costs. So Illinois going up more is offsetting that (you can complain about it, but technically you were paying less than you might have been a couple weeks ago). And my source expects prices elsewhere to rise more later in the week.
Oh, and before you say “See! Oil prices fell more than gas prices” check this out, over a six year period:
In a sense, we’re still recovering from that spike a year ago. Man, that really sucked Here are the prices from this morning, and it seems like little’s changed since (courtesy of AAA’s fuelgaugereport.com):
Gasoline: Rockford rose four cents to $1.89 a gallon. We have the second-highest gas prices in the state, but every metro area in the state rose significantly and they’re close to us. We’re the 53rd-highest of the nation’s 250 metro areas. The Illinois average rose almost five cents to $1.88. The national average rose four cents to $1.63 (EDIT: woops, $1.73). Illinois has the seventh-highest gas prices in the nation, including the District of Columbia. Only Alaska and Hawaii remain above $2 a gallon.
Diesel: Rockford rose more than a cent to $2.46 a gallon. We have the fourth-highest diesel prices in the state. The state average rose more than a cent to $2.54. The national average rose a cent to $2.42. Illinois has the 14th-highest diesel prices in the country. Only Alaska and Hawaii remain above $3 a gallon.
December 16th, 2008
Remember how I reported yesterday that Rockford’s gas prices had fallen below much of the rest of the state? No more. By the end of the day yesterday, we’d risen to fifth in the state …and today there was a big increase into the $1.80s. It appears to be an increase throughout the region, so wholesale prices must have jumped. Unfortunately for us, it makes sense - gas prices had fallen faster than oil prices, and oil seems to have stabilized. I don’t see any reason gas prices will top $2 anytime soon, unless OPEC’s production cut is REALLY big. But I’ve been wrong before…Here are the now outdated Tuesday morning prices (courtesy of AAA’s fuelgaugereport.com):
Gasoline: Rockford rose more than four cents to $1.69 a gallon. We had the fifth-highest gas prices in the state. More significantly, we rost to a tie as the 79th highest of the nation’s 250 metro areas. The Illinois average rose almost a cent to $1.71. The national average rose a fraction of a cent to remain at $1.66. Illinois is tied with the 16th-highest gas prices in the nation, including the District of Columbia. Only Alaska and Hawaii remain above $2 a gallon.
Diesel: Rockford dropped more than a cent to $2.63 a gallon. We have the third-highest diesel prices in the state. The state average increased a cent to $2.65. The national average increased a fraction of a cent to remain at $2.54. Illinois has the 13th-highest diesel prices in the country. Only Alaska, Hawaii and New York remain above $3 a gallon (Hawaii is still above $4).
December 15th, 2008
Gas prices in the Rockford area have fallen below much of the rest of the state (and Wisconsin, to boot) and we’re almost in the middle of the country’s metro areas. We’re below the national average, even (and my old town in Indiana surprised me by having prices higher than here).
Too bad there are signs things are bottoming out. Gas prices rose nationally this weekend for the first time in 86 days. OPEC is ready to announce a big production cut, they say. We’ll see what happens, but I wouldn’t expect prices to drop once more.
See how gas prices have fallen with oil, so if oil rises, expect gas prices to do the same:
Here are the prices (courtesy of AAA’s fuelgaugereport.com):
Gasoline: Rockford dropped half a cent to $1.64 a gallon, after a brief uptick over the weekend. We have the NINTH-highest gas prices in the state (Only Decatur and Springfield are below us). We’re down to 118th of the nation’s 250 metro areas. The Illinois average rose a cent to $1.70. The national average dropped a fraction of a cent to $1.66. Illinois has the 20th-highest gas prices in the nation, including the District of Columbia. Only Alaska and Hawaii remain above $2 a gallon.
Diesel: Rockford dropped two cents to $2.65 a gallon. We have the third-highest diesel prices in the state. The state average dropped three cents to $2.64. The national average dropped more than a cent to $2.54. Illinois has the 13th-highest diesel prices in the country. Only Alaska, Hawaii and New York remain above $3 a gallon (Hawaii is still above $4).
December 2nd, 2008
Anyone out there still believe gas prices won’t come back down? Because we haven’t seen prices this low in Rockford since early 2005. Back then, Green Day’s “American Idiot” was the top album in the country. OK, when I put it that way, it doesn’t seem so long ago. When adjusted for inflation, prices are lower then they’ve been since early 2004 (Top album would have been something like OutKast’s “Speakerboxxx/The Love Below” … Hey ya, indeed!).
We’ve had an unprecedented drop in the price of gas — more than half. In comparison, the average price of gas went from about $1.40 a gallon in 1981 to 90 cents in 1986. Yet people still find reason to complain. The most common is “why are we higher than the national and state averages?” I want to say, “Well, they’re averages, so somebody has to be above them, just like somebody has to be below them.” But that’s oversimplified, and when it comes to gas prices I try my best to, er, undersimplify things.
Now that prices have normalized from this summer’s insane peaks, you’re seeing pretty standard gaps in pricing around the state and the country. They all have to do with geography — the closer you are to refineries, the lower your taxes are and the lower the cost of doing business is, the lower gas prices will be, generally. First, look at things nationally. On Friday, Illinois’ average was $1.82 a gallon, according to AAA’s fuelgaugereport.com. That made it the 27th-highest state in the nation. We’re right in the middle, which is actually rare for us, we’re usually a bit higher.
If you look at one of the national gas temperature maps out there, you’ll see that generally the farther away from the Gulf Coast states are the higher their gas prices are. That’s because half of the nation’s refining capacity is on the Gulf. Taxes are another big factor — Illinois has some of the highest fuel taxes in the nation, though it’s come down a bit because our sales tax is a percentage, so the lower fuel prices are the lower that tax is.
But what about within Illinois, you ask? Why is the Rockford area — $1.87 on Friday — more expensive than Champaign-Urbana ($1.61), Peoria ($1.659), Springfield ($1.77) and most of downstate? Again, geography. Illinois itself only has about 5 percent of the nation’s refining capacity, and more than half of that is way downstate. The refineries in Chicagoland primarily serve Chicagoland, so we get a lot of stuff from south of here. Also, sales tax in Rockford and Machesney Park are generally 2 percentage points higher than in much of downstate. Finally, it simply costs more to do business in bigger cities. Employees make more, property costs more, insurance costs more, etc. Rockford is still the second-largest metro area in Illinois, so the fact that we’re usually the second- or third-highest metro area in the state makes perfect sense to me. It simply costs more to run a station in Rockford than in Peoria.
Don’t believe me? Try opening one yourself. Or ask the major oil companies why they’ve sold all theirs. There are simpler ways to make money. And simpler things to explain. I think I’ll try astrophysics next. Contact staff writer Thomas V. Bona at tbona@rrstar.com or 815-987-1343.
November 17th, 2008
And we’ve broken the $2 a barrel mark in Winnebago County. Specifically, in South Beloit, where there’s been a price war between a few stations up there (plus, as one retailer told me, “its competition is in Wisconsin, a tax advantaged state.”)
With oil now down around $55 a barrel, the rest of the area could be there soon. Probably Belvidere next, and eventually us in Rockford. Our records indicate the last time we saw prices below $2 a gallon around here was approximately May of 2005 (correct me if I’m wrong). For those of you who say gas prices never fall as much as oil, note that oil was last this low in February of 2007 … so gas prices have actually out-dropped (is that a word?) oil.
More in a little bit on my fuel price musings
November 10th, 2008
Gas prices in Rockford have fallen to their lowest since … well … since I’ve been paying attention. At least as low as they’ve been since February. Of 2007. We’re possibly staring at 2006 prices.
But it’s finally time to ask the question, “Is the bottom in sight?” It would appear to be simply because oil prices (around $61 a barrel now) are at March, 2007, levels. So gas prices have now fallen below where they were the last time oil prices were this low.
Of course, we’re in uncharted territory, so who really knows what’s going to happen next? Watch the global stock markets to gauge if oil will rebound, since energy prices are now tied to the economy. See if China’s new economic stimulus package (as Phil Flynn says, it’s “trying to put the fire back into their dragon economy” *rimshot*) turns things around too.
How little do I really know? On Oct. 2, when gas was $3.72 a gallon, I wrote, “At this rate, we’ll be under $3 in … well, probably never.” But prices have fallen almost $2 a gallon in the past seven weeks. Guess I reverse-jinxed it!
I got gas for $1.95 a gallon this weekend in Indiana. Rockford city is around $2.29 a gallon. Will we yet reach $2? Stay tuned.
Here are today’s metro area prices (as always, courtesy of AAA’s fuelgaugereport.com):
Gasoline: Rockford dropped three cents to $2.27 a gallon. We have the third-highest gas prices in the state.Champaign-Urbana, Decatur and Springfield are already below $2 a gallon. The Illinois average dropped almost two cents to $2.32. The national average dropped two cents to $2.24. Illinois has the 18th-highest gas prices in the nation, including the District of Columbia. Rockford is tied with the 87th highest gas prices of the nation’s 250 metro areas.
Diesel: Rockford dropped three cents to $3.08 a gallon. We’re now at levels not seen in over a year over on the diesel sid. We have the fourth-highest diesel prices in the state. The state average dropped four cents to $3.20. The national average dropped three cents to $3.10. Illinois has the 11th-highest diesel prices in the country.
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