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Friday, Aug 22, 2014
Transportation

Drop in gas prices not done yet

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Published:   |   Updated: July 14, 2014 at 09:16 PM

average price of a gallon of gas has fallen to $3.62, the lowest it’s been since April.

The better news: Florida averages about 6 cents below the national mark, and gasoline prices around the Tampa are cheaper yet.

The best news: Prices aren’t through falling yet.

“Oil prices hit a free-fall at the end of last week,” said AAA spokesman Mark Jenkins. “As a result, motorists in the southeast could see prices at the pump fall 10 to 20 cents in the next two weeks.”

Over the weekend, the national average for a gallon of regular unleaded gasoline fell for the 16th consecutive day, according to industry observers.

GasBuddy, a website that keeps track of gas prices around the nation, reported on Monday that the average price of regular unleaded gasoline in Florida was $3.54 a gallon while the average price in Tampa was $3.46.

According GasBuddy a gallon of regular unleaded was being sold at a Hess Express and a Wawa station on West Waters Avenue for $3.37 a gallon on Sunday, matching the cheapest price in town.

From there, the prices nudged upward, but the website reported 114 Tampa gas stations selling regular unleaded for below the state average.

The prices come from motorists who report to the website what they see, so there likely are other other service stations selling well below and wellk above the state average.

Ryan Lawson, who manages the Hess Express at 6351 W. Water’s Ave. said the prices at the retail level are driven more by local competition than the price of a barrel of oil, stockpiles and unrest in the Middle East.

He said a RaceTrac located nearby drives his pricing more than anything else. He has to be competitive on West Waters Avenue. His competition is in the same boat, he said.

“This is the lowest I’ve seen in a while,” he said. “I compete with other gas stations in my area. If they drop their prices, I drop mine. You can see their sign and my sign if you stand on the corner. Whatever his prices are, mine are, and whatever prices I have, he has.”

The big-picture reasons for downward spiraling prices are complicated but can be boiled down this way: Oil is selling at its lowest price in two months, U.S. stockpiles increased during the first week in July and supply risks eased in Iraq and Libya, according to analysts with AAA.

A barrel of oil sold for $100.83 on Friday, a $3.23 decline from a week ago.

Jenkins said there is no way to predict when gas prices will bottom out but said prices usually begin to rise by the end of July until mid fall, when they again cycle down. It all mostly depends on how much a barrel of oil costs, he said.

“The price of oil,” Jenkins said, “is the main driver of what gas prices are doing.”

Still, he said, the retail price of gasoline can vary from market to market. Florida, for example, tends to be less expensive than the national average, and gasoline tends to sell for a relative bargain in Tampa Bay.

“That’s a beautiful thing,” he said. The reason: “Tampa’s close to the port, so it doesn’t have any transportation costs built into the price of gas. You compare that to other cities, like Gainesville in middle of state; it costs more to transport gasoline there, so it’s more expensive.”

The direct result of cheaper gasoline is more people traveling by vehicle, he said. That was evident over the Fourth of July weekend, he said.

“There was a 3.3 percent increase (over last year) in people driving to their destinations,” he said.

Other factors figure in, he said, but cheap gasoline can determine how people travel.

“It’s Independence Day,” he said. “Most people are going to travel. In this case, gasoline prices going down might have influenced how those people decided to travel.”

kmorelli@tampatrib.com

(813) 259-7760

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