Dropping gas prices could go lower
A screen capture from Gasbuddy.com shows the cheapest gas prices clustered relatively close to the city of Washington.
Valero and BP shared the same price for gasoline Wednesday on Murtland Avenue in Washington, but a BP station a mile down Route 19 advertised regular gas for $2.37.
Pennsylvanians paid an average of $3.49 for a gallon of gasoline this time last year, but this year is a different story as gas prices have tumbled for more than two weeks to a current average of $2.49, according to AAA.
Yet, finding the lowest prices still comes down to filling up where there are a lot of gas stations.
“Gas stations always price with local competition within a five-mile radius, and the variety of competitors determines the price,” said GasBuddy.com analyst Jeffrey Pelton. The former Speedway pricing consultant said the fall season is bringing with it lower gas prices as an expected Iran nuclear deal, the beginning of winter gasoline production and the end-of-summer driving season blend to provide high-octane relief at the pump.
The average price of regular gas in Washington County hovered around $2.45 Wednesday, while the lowest prices recorded were $2.33 at various stations along Route 19. The average price of gas in Greene County was $2.55 Wednesday.
“The ratification of an Iran deal – the country has barges of oil ready to flood the market if this goes through,” Pelton said, “and that could push a barrel of crude oil down to $35. It’s sitting at around $43 now.”
When winter-blend gasoline begins distribution Sept. 15, Pelton said that could continue to push gasoline prices down through Christmas.
“It’d be a pretty nice present to see $2 gasoline by December. And it’s likely, because we’re going to see price drops of at least 10 cents each month for the next few months or so,” he said.
The underlying market conditions have been propped up by a flood of oil, according to Pelton, who said hydraulic fracturing technology is leading the way.
“In North Dakota especially, they’re pulling millions of gallons of crude out of the ground where we didn’t have access before. There hasn’t been this much oil in the market in 70 years,” he said.
The only present factors that could upend downward trending prices are destructive hurricanes, which have not been a factor this year, or the rejection of the Iran nuclear deal, which now appears unlikely.
Politics and Gulf of Mexico weather systems aren’t on the minds of motorists, though, as they keep their eyes trained on prices.
“We’re $2.45 back home, so prices are going down. I see it along the turnpike, and I drive a hundred miles each way for my job,” said Robert Hoffmaster of York, who was dropping off his son at Washington & Jefferson College after filling up at Speedway on Washington Road in South Strabane Township. The station was tied for lowest price Wednesday, sitting at $2.33.
Rewards programs that provide discounts on fuel also pull in loyal customers.
“I’ve got GetGo, Sheetz, Speedway – all the cards,” said Andy Witouski of Scenery Hill, who also was filling up at Speedway.
“The retailers, like Sheetz and Speedway, they almost give away the gasoline just to get people inside the store to buy food,” said Pelton. Speedway, GetGo and Sam’s Club all posted prices of $2.34 before any rewards program discounts.
“I try to fill up at Sam’s Club when I can, because I’m already here paying for the membership,” said Darlene Small of Cecil.
Speedway is the only station in Washington County to carry the hard-to-find supply of ethanol-spliced “flex fuel,” sitting at $1.85. Although Witouski drives a flex fuel Ford truck, he’s not buying it.
“It gums up your engine. It may be cheaper up front, but you’re damaging your engine and you don’t get the mileage anyway,” he said. Labor Day weekend drivers will enjoy the lowest gas prices in 11 years, but will join nearly 2.2 million vehicles on the Pennsylvania Turnpike through Monday, according to the Turnpike Commission.