With record fuel production and less travel, gas prices have dropped more than 15 cents a gallon since last month. Local residents should enjoy these prices while they can: Experts expect fuel prices to rise again in spring.
Murphy's gas station on S. Loop 256 advertised regular unleaded at $1.96 per gallon Monday. That's15 cents a gallon cheaper than the Texas average, and almost 50 cents below the national average of $2.43.
Palestine resident Daniel Cheney, a long-haul truck driver, said the benefits from cheaper fuel extend well beyond the pump.
“Our company has thousands of trucks on the road,” he said. “If we save 30 cents per gallon, that adds up to a lot of money. The company can invest in equipment, bonuses, or even higher salaries with the savings.”
U.S. gasoline production is at a record high, AAA spokesman Josh Tuber told the Herald-Press Monday. Cheaper crude oil prices and less travel in winter also have helped to create more supply than demand, pushing prices down.
Travel bans prompted by the global coronavirus, as well as people traveling internationally less frequently because of health concerns, has decreased demand for oil, Tuber said.
Texas fuel is typically cheaper than it is in most of the country. “The high number of oil refineries in Texas helps keep the price down,” Tuber said.
With spring, however, comes the “summer mix” gasoline, which is more expensive to refine.
Less volatile and more fuel efficient than winter fuel, summer mix gas has a lower evaporation rate, allowing it to remain effective during the heat of summer.
Twice a year, refineries go through a long, costly changeover – once in autumn for winter blends and once in spring for summer blends. The cost of the changeover, along with the higher production costs of summer mix gasoline, is typically passed to consumers.
The Organization of Petroleum Exporting Companies (OPEC) will meet later this month. If OPEC decides to slow production, that, typically, would push consumer prices up.
Record production in the United States, however, might keep prices low.
“We're currently producing about 13 million gallons of gasoline a day,” Tuber said. “That's more production than we have ever seen; in some local markets, crude oil is less than $50 a barrel. We'll know more after the OPEC meeting, though. We'll just have to wait and see.”