State's average gas price falling in time for holiday travel
CHARLESTON, W.Va. - West Virginians are getting a small present heading into the holidays: lower gas prices.
Gas prices have dropped across the region in recent weeks, falling more than 10 cents in the last week alone. The decline is part of a nationwide trend that's seen the daily average U.S. gas price drop 25 days in a row.
According to AAA, West Virginia's average gas price had dropped from $3.45 last week to $3.35 as of Wednesday.
AAA analyst Avery Ash said the nationwide declines were being driven by a combination of factors, including a switch to less-expensive winter fuel blends, cheaper crude oil, lower demand and increasing gasoline inventories.
But while the price is dropping, the average is still slightly higher than the $3.33 state average from one year ago.
Should prices stay above the year-ago level through the weekend, they will set another all-time high for the Christmas and New Year's Day holiday travel season.
But there are signs that prices are continuing to fall.
Prices varied substantially across the state on Wednesday.
Drivers at Sam's Club in Parkersburg actually saw regular unleaded at $2.99 per gallon Wednesday morning. Some Parkersburg Speedway customers with discount cards were able to pay $2.97 per gallon.
That would mark the first time in more than a year that state drivers paid less than $3 for a gallon of gas.
Charleston area drivers haven't been as fortunate.
Gas stations near the Capitol still had $3.49 prices posted as of Wednesday morning. Other Charleston stations had prices between $3.29 and $3.39, according to GasBuddy.com.
Putnam County drivers were enjoying prices in the $3.15 to $3.09 range.
Drivers aren't the only ones happy to see lower prices.
Jan Vineyard, president of the West Virginia Oil Marketers and Grocers Association, said retailers also are glad to see the decline.
"Believe it or not, the lower the price, the happier we are," Vineyard said.
It all has to do with the amount of money gas stations have to set aside to buy fuel.
Storeowners have to pay upfront for deliveries of wholesale gasoline to fill station tanks.
But the store's return on investment - usually a profit of 1 or 2 cents per gallon - isn't realized until either the customer pays cash or bankcard companies credit the store's account for debit and credit transactions.
When gas prices go up, retailers have to set aside more cash to make their fuel purchases. This means retailers have less capital to invest in other, more profitable parts of their businesses.
Vineyard said the drop in gas prices means customers may have more money to spend on other items.
"The less money you spend on gas, the more money you have on disposable things," she said.
She said retailers have been making investments in store improvements and expanded product offerings in recent years. Now they hope consumers will be able to take better advantage of them and develop loyal buying habits.
"We've really diversified in the last few years on what we have to offer," Vineyard said. "Hopefully, if people have more money to spend inside, the more likely they are to come back."
Vineyard said Charleston prices might drop to the cheaper levels around the state in the coming days.
Parkersburg retailers are more sensitive to price swings in the Chicago and Great Lakes wholesale markets, Vineyard said. Those prices have plummeted in the past few days, and the decline has had a trickle-down effect throughout the region.
She said retailers with higher prices should start lowering their prices once new deliveries of lower-priced wholesale gas arrive.
"A lot of it depends on transit times and how much fuel you have in the ground," Vineyard said. "It won't take long for it to all catch up."
Prices could stay in this range for some time, too.
Vineyard said the U.S. Energy Information Agency recently updated its forecast.
The agency now predicts U.S. gasoline prices for 2013 will average $3.43 per gallon, down 20 cents from the $3.63 average in 2012.
The agency predicts national gas prices will stay in the $3.30 to $3.40 range through March, before increasing to the mid-$3.50 price range when the summer driving season begins in May.
Contact writer Jared Hunt at firstname.lastname@example.org or 304-348-5148.