Despite gas prices having been were on a downward spiral for a record of 123 consecutive days, they’re slowly rising again but not too much.
Anabelle Porio ’15 was a big fan of the low prices. Last month, she paid about $25 for gas compared to last summer when it cost around $40 to fill up her Hyundai Elantra. Instead of spending her money on gas, Porio had the chance to save some cash “for pocket money to have at college.”
Owner of the Compo 66 gas station, Bob Myers was also pleased to see the prices in the low $2 range this winter.
“It’s better for us because our inventory costs aren’t as much,” Myers smiled.
On Groundhog Day, while prices were still at their lowest point, AAA released a daily fuel gauge report, putting the prices into perspective.
When the report was published on Feb. 2, it noted that the “national average price of gas [was] $2.06 per gallon, which [was] about $1.22 per gallon less than a year ago. AAA [estimated] that Americans [spent] about $365 million less per day on gasoline compared to [that] time last year.”
The reason for the drop in price a few months ago cannot easily be explained. However, author Clifford Krauss of the The New York Times article, “Oil Prices: What’s behind the drop?” said it boils down to supply and demand.
“United States domestic production has nearly doubled over the last six years, pushing out oil imports that need to find another home,” Krauss wrote.
Countries that heavily relied on exporting oil to the the United States for money, like Saudi Arabia, Nigeria, and Algeria, suddenly had to compete to sell their oil in the Asian markets; this forced producers to lower the cost of oil. Krauss also noted in his article that the popularity of energy-efficient cars in Europe has also caused a decrease in demand for oil there.
Westporters, unlike citizens in oil-production-heavy countries, aren’t seeing the bad effects of this conflict.
“There are [no negatives] at all on our end,” Myers said, as he watched customers fill up their tanks through the window. “In other countries,” his voiced trailed off, referencing the issues Krauss mentioned. Myers added that he’s been actively reading about this international conflict.
In the news, Saudi Arabia has stolen a lot of the spotlight for having a stable economy, despite the oil disaster. This country is one of the many that exports oil as a primary source of income. Prior to the decrease in demand for oil, Saudi Arabia had 800 billion dollars tucked away in reserve, according to Krauss.
While countries like Nigeria, Algeria, Russia, and Venezuela are facing economic difficulties, Saudi Arabia is still producing as much oil as they normally would. These poorer countries want the Saudis to scale back production.
This would allow prices to increase again; however, Saudis argue this action would only please the countries suffering; there’s no personal benefit.
The decline in prices did reverse to a steady incline in February, though, without the Saudis changing their minds. This increase is not unusual from any other year, however.
According to WRCB TV, a NBC affiliate in Tennessee, “gas prices normally rise between 30 [to] 50 cents during the spring, as refineries conduct seasonal maintenance.” This procedure, enforced by the environmental protection agency, is done twice a year to switch from winter-blend to summer-blend fuel.
Luckily for Americans, gas prices are expected to still stay relatively low compared to recent years.
According to the AAA website, “AAA does not expect the national average price of gas to rise above $3 per gallon in 2015.”
Many adults, familiar with the typical spike in gas prices this time of the year, saw the increase coming.
Math teacher Stacey Delmhorst didn’t get her hopes up when she saw the low prices, knowing they’d go up again sometime soon. While discussing post-college budgets with her personal finance students, she warned them not to shorten that budget line item, confident the prices wouldn’t stay that low.
Practicing what she preached, Delmhorst didn’t adjust her own budget.
“They will eventually go back up, so I am leaving my budget as is in anticipation of that,” Delmhorst said.
Porio also knew the glory days of low prices couldn’t last forever.
“I was just enjoying it while it lasted,” Porio added.