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SALT LAKE CITY — With fuel prices plummeting, many Utah consumers are reaping some significant financial benefits.
GasBuddy.com reported that the average gasoline price in Salt Lake City fell nearly 18 cents per gallon in the past week to $2.01 as of Sunday. The consumer site surveyed 380 gas outlets across the Salt Lake City metro area.
Nationally, the average price at the pump fell 5.4 cents over the same period to $2.12 per gallon.
Medical sales professional Katrina Rougelot drives her SUV up to 300 miles per week just for work, not to mention even more miles for other family-related errands and activities. She said the drop in gas prices has really made a difference when she fills up her tank.
“I use my car every single day Monday through Friday for work,” she explained. Her territory extends from Ogden south to Provo.
Since gas prices fell to the $2 range, she has been elated to see how much money she is saving.
“The highest I’ve paid to fill up is about $65. Now it’s down to about $42 or less,” Rougelot said. While she is excited about the extra savings, she said, “the one downside is sitting in line to get gas.”
She estimates that she could save more than $1,000 annually at this rate, although prices could begin to climb as the summer driving season approaches.
But Zions Bank economic adviser Randy Shumway warned that fuel prices typically begin to rise heading into Memorial Day, where they “plateau” and remain at those levels through Labor Day.
“It’s expected that the average price of gasoline throughout the entire year will be about $2.60 a gallon,” he said. “What that does is give additional disposable income to consumers, which, often times, they will spend on other items.”
Like Rougelot, Utahn Mikhail Kotlov also drives an SUV and fills up every three days or so. He, too, is grateful for the all money he is now saving at the pump.
“(The cost of filling up) has dropped by far,” he said. “It has gone down from $90 to about 60 bucks to fill up. It’s pretty nice.”
Both drivers said they will use the fuel savings mostly on other household needs but may splurge on something fun.
Including the change in gas prices in Salt Lake City during the past week, prices on Sunday were almost $1.07 cents per gallon lower than the same day one year ago and nearly 69 cents per gallon lower than a month ago.
The nationwide average has declined about 49 cents per gallon during the past month, standing almost $1.19 per gallon lower than the time period last year.
Since last week, about 12,000 stations dropped their price under $2 per gallon, said Patrick DeHaan, senior petroleum analyst with GasBuddy. With 45.1 percent of all gas stations (nationwide) now selling gas below $2, the national average currently stands at its lowest since May of 2009.
Related
Economists: Low gas prices could be problematic beyond short term
It's hard to find a driver complaining about plummeting gas prices, but some economists warn plunging oil prices could present economic problems if the pattern continues beyond the short-term.“This time around, the drop in gasoline is far more joyous and isn't overshadowed by a polar plunge in the economy,” he noted. “And it doesn't stop there. Overnight, the average price for diesel fuel in the U.S. dropped to under $3 per gallon for the first time since October 2010, and will shed yet another 25 cents to 50 cents per gallon before reaching a bottom.”
Meanwhile, various domestic midcontinent crudes have dropped to the $30 per barrel range, the "danger zone" where oil companies start to cut back on operations, DeHaan said.
On the global energy front, Saudi billionaire businessman Prince Alwaleed bin Talal told U.S. Today, “I'm sure we're never going to see $100 any more.”
He believes that global forces will converge to keep oil supplies at current levels while maintaining low to moderate pricing for the foreseeable future.
Closer to home, increased domestic energy production combined with decreasing oil demand in China and Europe, along with rising Middle East petroleum production, have driven crude oil prices, and therefore gasoline prices down dramatically, Shumway said.
With Arab oil producers expected to maintain their current production levels in an effort to maintain their global market share, gas prices will likely stay relatively low, he noted, which is good news for drivers everywhere.
