Ellie Reyes
Everyone knows that heart dropping feeling when their low gas light turns on. That feeling of dread you endure when you know it’s that time of the week to fill the tank. Well people, right now is a great time to fill your tank as much as you can. Gas prices are at an all-time low with $2.44 per gallon, which is the lowest it’s been all of 2018! Personally, I pay $50 to fully fill my car up with gas, but today it was only $35! I don’t know about all of you, but I could get used to this.
There has been an increasingly large supply of gas taking place lately all around the world. This has caused the decrease in gas prices. According to AAA, “There is more Iranian supply in the market than expected due to the U.S. granting crude sanction waivers to some of Iran’s largest importers, including India, South Korea and Japan” (“Growing”). The Organization of Petroleum Exporting Countries talked about potentially cutting crude production by up to 1 million barrels per day to try and even out the supply of oil. AAA also states that as long as crude stays below the $60/bbl mark, us Americans will continue to enjoy the cheap gas prices through the end of the 2018.
This is a shock to all of us, considering the average gas price in the summer came to a high of $2.97 per gallon. Although prices are low right now, they fluctuate greatly all the time. Below is some data that shows the wide range of gas prices in different states.
Highest and Lowest Current Gas Price Averages:
Top 5 states with lowest gas price averages: Missouri ($2.01), Oklahoma ($2.09), South Carolina ($2.09), Texas ($2.10) and Alabama ($2.12)
Top 5 states with most expensive gas price averages: Hawaii ($3.62), California ($3.49), Washington ($3.27), Alaska ($3.19) and Nevada ($3.12)
Top 5 states with the most stations selling gas at $2.00/gal or less (percentage of stations): Missouri (58 percent), Oklahoma (52 percent), South Carolina (41 percent), Texas (40 percent) and Mississippi (35 percent)
(“Growing”)
As stated in the stats above, the Mid-Atlantic and Northeast have very high gas price averages that are increasing by the day. Wherever you live in the U.S, your gas prices are going to vary. Arctic temperatures and violent winter weathers are main causes for the lack of supply (gas) being demanded in the Mid-Atlantic, that is just a given. DiLallo states that four main factors influencing the price of gas in the South and South east are: taxes, distributing and marketing, refining, and crude oil.
According the diagram above, “About half the price is derived by the value of crude oil, followed by refining at 22%, taxes at 17%, and distribution and marketing at 10%. Because crude oil is traded on the global marketplace, it doesn't have a lot of impact on the difference between gas prices by state” (DiLallo). The U.S average for state gas taxes in 2015 was $0.48 per gallon, which is much lower than individual states amount per gallon. Every state varies in each category, for example refining is very common in California because they are known for their stiff environmental regulations. This condition is higher than federal regulations and add to the cost of refining gasoline in the state.
(“National”)
It is great to have such a low gas price at the moment, but as shown above, gas prices change by the day and will either be amazing or just put you in a bad mood. In 2016, the price was as low as $1.60 per gallon! How great would that be. The price of gas all depends on the supply and demand of crude in the world and how high taxes are becoming around the state you live in.
Works Cited
DiLallo, Matthew. “3 Reasons Why Gas Prices Differ By State.” The Motley Fool, The Motley Fool, 26 July 2015, www.fool.com/investing/general/2015/07/26/3-reasons-why-gas-prices-differ-by-state.aspx.
“Growing Global Crude Supply Outpaces Demand, Driving December Pump Prices to Cheapest of the Year.” AAA Gas Prices, 7 Dec. 2018, gasprices.aaa.com/q4-gas-report-growing-global-crude-supply-driving-december-pump-prices/.
“National Gas Price Average Holds Steady.” AAA Gas Prices, 8 Jan. 2018, gasprices.aaa.com/national-gas-price-average-holds-steady/.
I would love to see these gas prices continue to drop. I take envy on those who get their parents to fill up their car for them. I don’t have that luxury. I enjoy going to the pump and seeing a lower number than I did last time. My dad hates spending money, so it’s also good to see gas prices drop, because he’s in an overall better mood (and he’s not alone). The only one who doesn’t like the decrease in gas prices are the ones who run the gas stations that are now getting less profits than before.
ReplyDeleteI have definitely noticed the gas prices dropping recently which is interesting because of it being the holiday season in which a lot of people travel and consume the gas. Also, based of of your statistics on the states with the lowest gas prices it seems to be states that have a lot of oil directly available to them and opposite for the highest priced states. Additionally, I think it is interesting, based on your graph, that each year the gas prices rise in the summer, and then tend to fall back down in the fall. I would definitely love for gas prices to continue falling as it would be nice to pay less at the pump.
ReplyDeleteDriving by the local Kwik Trip I have also noticed that gas prices have been falling lately. This is a very good sign as people are able to buy gas at lower prices and also have more money to spend on other things. The demand for gasoline in America is very inelastic, so no matter the price, people are always going to be buying it. Because of this, when the prices go down, it allows many people to have more spending money in their pockets for other events or activities they would like to attend instead of filling up their gas tanks.
ReplyDeleteI don't have a car yet so I just actually noticed the prices dropped today. Since gas is an inelastic demand I wonder if the government could have a higher gas tax when the price of oil and gas is lower and a lower tax when it is higher. This way the price of gas would always stay the price. While the government would absorb the benefits of the price of gas being low and absorb the loss when the gas price is high. Making gas prices more consistent for consumers.
ReplyDeleteSeeing that gas prices are falling makes me happy, but I don't feel like it will last long. Considering gas is a finite resource, eventually supply will decrease again. The demand for gas is fairly inelastic therefore supply will decrease but demand will remain the same which will drive prices back up again.
ReplyDeleteNice blog Ellie! The supply and demand here is huge for gas. Different sanctions, natural disasters, and governmental issues between the United States and OPEC can cause the supply to decrease for gas and the price to drive up. This affects people in America greatly since the demand for gas is very very inelastic, and therefore quite insensitive to a change in price. Essentially, people need gas and will end up paying more automatically due to policy changes with OPEC. Now it's great that gas prices are low, and we hope that continues.
ReplyDeleteYes, currently gas prices have been low, but gas is a relatively inelastic good. Meaning that just because gas prices are lower, people are all of the sudden going to use more gas. The same thing works when gas prices rise, when gas prices increase people cannot just stop using their car as much. Gas is something that most everyone is going to purchase regardless of the price. The gas light turns on which means you need to go get gas. You cannot just choose to not get gas because prices are high, you still need to get to and from places. Over time there can be some changes made, but gas prices typically are not permanent, they fluctuate pretty often. I agree with you, and other comments. I am not complaining about the low gas prices, but its not like I am can stock up on gas right now while prices are low.
ReplyDelete