Travelers are reaping the benefits of the lowest gas prices of the year, with one local station dipping close to $2 a gallon earlier this week. With the holiday approaching, it's a safe bet drivers don't care much what caused the plunge or how long it will last.
Nationwide, the price for a gallon of regular gas averages around $2.60 a gallon. At the Murphy USA station in the Palestine Walmart parking lot, the lowest prices in town, prices dipped to $2.07 a gallon earlier this week, before rising to $2.15 late Thursday.
Prices are even lower for members of the free-to-join Murphy USA club, which rewards members for purchases made at the pump and in the convenience store.
Some experts say this gift to vacationers is due in part to lower prices per gallon of crude oil, and refineries operating at normal levels. Others believe the lower prices result from the threat of tariffs the Trump administration has placed on China and Mexico.
For instance, the price per-barrel of oil went up by 50-cents in early June, after Mexico signaled it was interested in cooperating with U.S. demands to help stem the tide of migrants at the border.
The threat of a five-percent tariff could easily rocket to 25 percent, analysts say, as it already has with $250 billion worth of Chinese imports.
This means more good news than bad at the pump for the summer. Analysts warn that if tariffs are lifted, however – or in the case of Mexico, avoided altogether – the price for gas is likely to skyrocket next year.
An unintended victim of the lower fuel prices has been trucking companies, who most would think would benefit from the savings. Not so, said John Martinez, owner of Orzei-Black Trucking, a national company based in Georgia that does business through East Texas.
“It should be a benefit, but the market is dropping,” he saids. “Because of the tariffs, there's less freight being hauled. Even though we're saving at the pump, fewer jobs means less money.”
Martinez said years ago, with a less-robust economy, trucking companies had to do more with less. Now, the market has responded to what it thought was a booming industry with a flood of new trucks, drivers, and companies.
“It's like the stock market,” he said. “When it got too much interest, it just went bust.”
Martinez said once the threat of tariffs are off the table, manufacturers will start importing more goods for his drivers to deliver.
“Of course, the gas will most likely go up again in response,” he said. “It's a vicious cycle.”
Although the future remains unknown, analysts say the highest gas prices of the year should be in the rear-view mirror.
In other words, enjoy the price-drops while you can.