Wednesday, November 7, 2012

When will gas prices drop in Idaho?

National average drops 13 cents in a week

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By TONY EVANS
Express Staff Writer

Motorist J.P. Reddy fills up his tank Tuesday at the Mountain View Grocery store and gas station south of Ketchum. Photo by Willy Cook

With the holiday season on the horizon, Idaho drivers are probably wondering when—or if—lower gas prices will arrive. 

Average fuel costs in the United States dropped 19 cents during one week in late October, yet Idaho’s average pump prices dropped only a penny, Idaho AAA Public Affairs Director Dave Carlson reported on Oct. 24.

Carlson derived his conclusions from a review of data from 120,000 gas station pump prices posted on the online website “Opis.” 

On Monday, Carlson said in an interview that Idaho had the fifth highest gas prices in the nation, about 30 cents higher than the national average.

The price at the pump for regular gasoline at the Sinclair station in Sun Valley on Monday was $3.94 per gallon. The price at the Main Street Hailey Chevron station was $3.99 per gallon. The average price for regular in Idaho was $3.76 per gallon.

Carlson said higher-than-normal gas prices in Idaho last summer were likely the result of refinery fires and shutdowns on the West Coast, in the San Francisco Bay Area and in Anacortes, Wash.

“We’re speculating,” he said. “The industry doesn’t talk about these things very much.” 

Carlson said gas usually delivered to southern Idaho through a Chevron-owned pipeline in Salt Lake City could have been diverted to the West Coast market to meet demand, sending Idaho gas prices higher.

He said Idaho’s “isolated” position with regard to refined gasoline supplies leads to the state’s “stubbornly resistant” gas prices, which today remain high, despite drops around the country. 

“Without competition in the marketplace, you can set the standard,” he said. “There is not the access [in Idaho] to refined fuel that you have east of the Mississippi.”

Calls to Sinclair corporate offices and local gas stations seeking comment on why Idaho fuel prices remain high were not returned this week.

Carlson said refineries in this region are, perhaps by design, only producing just enough gasoline to get by. 

“There is very little inventory,” he said. “Even in the fall when prices should be dropping off, the market continues to do well for wholesalers.

“It’s possible that retailers are holding onto gas they purchased at higher prices a little longer because demand is down. But what they’re buying now is substantially lower in cost.”

Carlson said prices began to drop in northern Idaho last week, with the average pump price for regular in Coeur d’Alene dropping from $3.81 to $3.58. 

“Idaho is just about a month behind the rest of the country,” he said. “Our expectation is that prices should drop through Christmas, then go up around mid- to late-February.”

He said prices are likely to rise then due to increased speculation on oil futures in anticipation of the 2013 summer travel season.

Tony Evans: tevans@mtexpress.com

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