Gas prices uncertain: More people optimistic about coronavirus; amount of travel increasing
Gas prices have been on the rise for the past few weeks, but whether or not that trend will continue depends on how the coronavirus pandemic affects travel.
AAA Alabama Spokesperson Clay Ingram said the average price of gas in Alabama is $2.65 per gallon currently, which is 86-cents higher that the $1.79 per gallon average price last year. But, Ingram said the current price isn’t that far off from non-pandemic years.
“It’s not that the prices are so much higher this year, it’s just that they were so much lower than normal last year,” Ingram said. “The demand was low last year because of the pandemic. People were working at home and people weren’t traveling and taking vacations. When that happened, the demand went down and the prices followed. Last year, we even had some refineries on the Gulf Coast that closed to keep from flooding the market with gas. So, right now, there is nowhere for gas prices to go but up.”
Ingram said it’s currently a little difficult to predict what gas prices will do in the coming months. He said typically, prices peak around the Memorial Day weekend and then level off for the summer before prices hit the downhill slope in the late summer around the Labor Day weekend.
“Right now there is a lot of optimism about the pandemic,” Ingram said. “People are getting vaccinated and there’s a ton of pent up demand for travel. Travel agents are booking a lot. People are getting ready to go. So the demand for gas is up. We could see gas pries get a little higher.”
Ingram said gas prices have dropped by 3-cents per gallon in Alabama during the last week and the national average has gone down 1-cent in the same time period. But, he said it was a little to early to tell whether or not that was a trend. He said he still expected the price to peak around Labor Day, but he said the peak could occur a little earlier, or perhaps already has. In either case, he said he didn’t expect prices to get much higher than they are now. But, he said it was still a wait-and-see proposition because it was difficult to predict how people would react to changes in the status of the pandemic.
Even though prices are higher compared to last year, the Southeast is still paying less at the pump than the rest of the nation. Ingram said a lot of that had to do with the Southeast’s proximity to Gulf Coast refineries and the transportation costs.
Currently, California has the highest average price for regular gasoline in the nation, which is $3.90 per gallon. The lowest price in the nation is Mississippi at $2.59 per gallon. While that’s a wide range in price, Ingram said consumers can still have an effect on the bottom line at the pump.
While there’s not a lot an individual consumer can do about the price at the pump, Ingram said there is power in collective buying habits. Ingram said consumers have two weapons in their arsenal to fight higher prices at the pump — fuel economy and price shopping.
Ingram said people do well with selecting vehicles with good fuel economy cars, but as consumers, he said people, in general, were “terrible” at price shopping.
“In a lot of cases, the people doing the loudest complaining about gas prices are the ones that aren’t price shopping,” Ingram said. “People shop by convenience. We choose a location close to where we live and work that is on the right-hand side of the road, so we don’t have to cross traffic, and we pick a location that has bright lights, looks safe and has easy access. And then, that’s where we go, because that’s where we go.”
Ingram said consumers should pay more attention to the prices at the locations they stop at for convenience. He said by looking around a little, people may find a station with gas about 5-cents cheaper per gallon. He said saving $2 or $3 per tank isn’t that much, but over the course of a year it adds up. He said if more people shopped around for low priced gas, it would put downward pressure on demand and would lower the cost at the pump in the long run.