Experts say low gasoline prices are expected to stick around into winter.
It means immediate savings for everyday drivers as well as for those hauling freight, which could contribute to lower prices on store shelves.
Recently, “for the first time in six years, the diesel average fell below the regular average,” said Jeff Pelton, the East Coast senior petroleum analyst for GasBuddy.com. “Really, really good times right now for consumers, and it’s going to get a lot better.”
The price of a regular gallon of gas was $2.38 in Maine this week, compared to $3.49 this time last year.
In Lewiston on Friday, a gallon of regular was as low as $2.25 and a gallon of diesel as low as $2.39, according to GasBuddy.com.
“We have a feeling that prices are going to drop 10 to 12 cents each month beginning in September, going through December, and even continuing into 2016,” Pelton said. “Your average price in Maine should be below $2 by Christmas, and that’s the average price.”
On top of strong U.S. oil supplies, he said two factors will kick in soon: On Sept. 15, refineries switch over from summer grade gasoline to winter grade, which is less expensive to make. The end of summer also signals the unofficial end of the “driving season;” fewer road trips, less demand, lower prices.
“That’s why we feel like the next four months are going to be just great times,” Pelton said. “The one thing I would look for in 2016 that would really help the consumer is if the Iran (nuclear) deal is ratified. That could even drop prices lower.”
His company is at work on long-term economic-impact projections, but it’s already figured that for four days over the Labor Day holiday, U.S. drivers are saving $1.4 billion over last year.
Prof. Jonathan Rubin at the Margaret Chase Smith Policy Center and School of Economics at the University of Maine, said the drop in diesel prices relates to refinery outages in California.
“There’s just relatively more diesel than there used to be versus gasoline, so they’ve gotten back to price parity, and that’s a historic change, the first time since 2009,” he said. “It has to do with which specific refineries are out and which ones specialize in different cuts of gasoline and diesel. Low diesel prices are going to benefit anybody who’s using shipping.”
Brian Parke, president and CEO of the Maine Motor Transport Association, which has 1,300 member companies, said how much trucks are saving per fill-up depends on the amount bought at once, any standing agreements and the location of the station — too many factors to craft any sort of savings estimate.
But, no question, it’s adding up.
“Typically, fuel ranks as the second-largest expense for trucking companies, second only to labor, so obviously we can’t overstate the importance of fuel cost to the trucking industry,” Parke said.
Trucking remains the dominant mode of transportation in the U.S. to move goods, he said. “It’s a good thing for the supply chain. It’s also a good thing for the consumers, who, when the diesel prices were up over $4 a gallon, years ago, that was getting passed on.”
Look for falling prices to have the opposite effect.
kskelton@sunjournal.com
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