The price of gasoline in the area is behaving like a roller coaster, having fallen more than 15 cents per gallon in the last week, but preparing to climb again soon, experts said.
Retailers are likely to hike prices significantly in the next day or two, reflecting “routine price cycling” in the region, said Patrick DeHaan, a senior petroleum analyst at GasBuddy, which operates more than 250 gas price-monitoring websites in the U.S. and Canada, including southwest Ohio.
DeHaan compared “volatile” area gas prices to a roller coaster ride. “Where prices stand today is right at the bottom of the hill before they zoom higher,” he said Monday.
The anticipated price increase will account for a spike last Friday in wholesale gas prices and restore gas stations’ profit margins, which have fallen in concert with gas prices, DeHaan said.
Retail gas prices are likely to jump 20 cents or more, and then drop two or three pennies per day until the stations’ margins once again approach zero, which will lead to another price hike at the pump.
“We are on this endless loop of that price behavior,” DeHaan said.
Area gas prices on Sunday averaged $3.36 per gallon, which was nearly 38 cents lower than the same date last year and more than 31 cents lower than one month ago, according to data from GasBuddy.com. Local prices were 22 cents below the national average of $3.58 per gallon.
“We have seen some pretty substantial declines over the last week to 10 days,” said Cindy Antrican, public affairs manager for AAA Allied Group Inc.
Gasoline supplies are sufficient to meet current demand, Antrican said. That demand will start to drop this week as a number of area school districts begin classes, ending the summer travel season, she said.
“When supplies are sufficient and demand goes down that equals better pricing,” Antrican said.
DeHaan said area gas prices for Labor Day will be from $3.40 to $3.80 per gallon, before an annual seasonal drop in mid-September as retailers switch over to less costly winter gasoline.
However, that doesn’t account for possible hurricanes in the Gulf of Mexico, which can close oil rigs and refineries, and quickly drive up prices. The National Oceanic and Atmospheric Administration (NOAA) is predicting an above-normal Atlantic hurricane season.
For jobs that involve heavy driving, the cost fluctuations can get passed on to the employee or customer. A dispatcher at Air City Cab said their average taxi driver spends between $50 and $65 daily on gas—at least a tank a day—but the reimbursement rate doesn’t increase with gas price spikes. The difference then comes out of the driver’s pocket.
Chris Wertz of Huber Heights’ Natural Creations Lawn and Landscaping said that when gas tops $4 per gallon, he adds on a dollar per visit.
“If you keep a tight schedule, you save money because we don’t have to worry about guys doing an extra fifteen minutes here and there,” said Wertz, who spends between $400 and $500 per month on his two trucks.
That pales next to the $18,000 monthly gas bill for Bladecutters’ nearly 40 vehicles.
“We try to keep track, but we’re like everyone else at the mercy of the oil companies,” said Bladecutters President John Scott. “It’s like timing the stock market.”
For the last few years, Dayton city government has managed to keep its fuel costs consistent by hedging through a broker. For August, they have 7,000 gallons — 18 percent of the monthly usage — locked in at $2.76 per gallon, according to Public Works Director Fred Stovall, who manages the city’s fueling station where some public employees get their gas.
See maps that show county-by-county gas prices across Ohio and the nation at myDaytonDailyNews.com