Gas prices put the pinch on
KINGMAN - In these dark days where $4 a gallon for gas isn't an unrealistic nightmare, but an accepted eventuality, no news is usually good news where the pump is concerned.
Unfortunately, we've got news.
The Department of Energy this week released a revised outlook for both gasoline and crude oil prices over the coming months. The good news is, gas prices are expected to peak, as they typically do, in early June - at about $3.73 nationwide for a gallon of regular unleaded. After that, prices will level off to an average $3.52 a gallon for the remainder of the year.
The bad news, according to Linda Gorman, Public Affairs Manager for the Arizona branch of the American Automobile Association, is that there's no guarantee prices will do what they're typically supposed to - after all, they didn't last year.
It's normal, Gorman said, for gas prices to rise throughout the refinery maintenance season that occurs every spring, level off through the summer, peak again around Labor Day, then fall again as the Atlantic hurricane season tapers off. That didn't quite go according to plan in 2007, however.
"The price of oil was high all fall and winter, which prevented price drops for gasoline," Gorman said. "So this is the first year, really, that we just haven't had the fall/winter drop in gasoline."
With prices failing to drop, drivers have been forced to curtail their expeditions and downsize their vehicles, but they're not the only ones feeling the pinch - Hetal Dave owns the Gas Plus gas station at 2266 Kingman Ave. As prices climb, he said, customers are less likely to spend money on goods inside the gas station, and more on the gas itself.
"Overall, people are not spending as much in the store as they used to," Dave said.
What's more important to Dave, however, is that it's his store people are coming to in the first place - as his customers look to cut their costs by as much as possible, Dave has found that charging a few pennies less than the nearest competitor can sometimes spell the difference between a busy afternoon and a day's worth of staring at oil stains.
"You need to be more competitive on gas to get people in the store, that's for sure," he said.
Mike Collins is one of the two owners of Station 66, a new station at 4115 E. Thompson Ave. Though he's only been in business for about a week, Collins has found that location has played a key role in keeping his business rolling - as one of the last stops on the way out of town, Station 66 has attracted a good share of customers who drop in because they remembered to buy milk at the last minute.
"It probably helps a little bit, where they don't have to drive all the way back into town for some of the quick-needed products," Collins said. "I think that's the key for where we're located."
But the double-edge to that particular sword, of course, is the fact that fewer people have been opting to joyride down Route 66 due to the prohibitively high gas prices.
According to Gorman, what's really altered gas prices in the last year has been the sudden volatility of the oil market - at over $124 a barrel, crude oil prices are already double what they were a year ago, and investment firm Goldman Sachs suggested earlier this week that prices could scrape the $200 level by year's end. Gorman suggested such lofty predictions are made more to "talk the price up" for the benefit of investors and oil speculators than they are to inform the average consumer, and AAA, she said, was not anticipating any sharp increases in price over the summer. If that prediction holds true, gas prices might just do what they're supposed to.
"Barring big hurricanes that devastate refineries, we should see a drop around November, December, January," Gorman said. "That's usually what happens. It didn't happen in 2007, and so because it didn't happen, it's made the more recent price hikes even more severe."
But Gorman also said that the continued laser-beam focus on oil prices is likely to continue feeding the fear of further increases, which could lead us to the second year in a row with no winter price drops - and more bad news.
"Right now the story is all oil prices," she said. "If oil prices continue their record run, then more gas price increases are going to follow regardless of what time of year it is."
According to AAA's Fuel Gauge Report, available at www.fuelgaugereport.com, Arizonans currently pay the second-lowest average price for gas in the country - $3.482 for a gallon of regular unleaded, less than a cent above Wyoming's rock-bottom average of $3.475. California's gas is the priciest among the lower 48 states, at $3.929 per gallon, with only Alaska paying more - $3.941 per gallon.
While AAA does keep pricing statistics for several metro areas throughout Arizona, Mohave County does not have enough gas stations to produce a clear average. The metro area nearest to Kingman is Prescott, where gas averages $3.499 per gallon.
As of May 9, all Arizona metro areas were paying local records for gas with the lone exception of Flagstaff, where the price of regular unleaded last peaked May 1 - at $3.58 per gallon.