Will Gas Prices Keep Going Down?
This is a question that has all of social media buzzing, and it's on a lot of our minds as Montana consumers feel the crunch of the "r-word."
We try not to use it either; saying the r-word gives gravity to the problem. Instead, try replacing it with something innocuous, like "donut" (or whatever)
In July of 2021, the average gallon of 87 octane in Missoula and Ravalli Counties was $3.30. Since then, it steadily climbed as we battled our way to 2022, and continued rising through Q1 and Q2. By the end of May, we were paying $4.40/gallon.
Then came Memorial Day
It's long been known that as Memorial Day marks the beginning of summer vacations and is a heavy travel weekend (only the weekend after Thanksgiving sees higher traffic), gas prices surge leading up to it.
In Missoula County, we saw an immediate $.10/gallon increase on May 27th, and by the end of the first week of June, we were looking at prices in the $4.70/gallon range.
Rising gas prices aren't the fault of the gas stations. In fact, the local stations in Western Montana compete for your business (and mine) by keeping prices as low as possible.
So who's fault is it that we're paying an arm and a leg for gas these days? The answer: supply and demand.
There are only so many oil refineries in the United States, and they've been at maximum operating capacity since COVID hit. When those refineries had to suspend or shut down operations thanks to workers potentially getting sick, the supply of available diesel and gasoline decreased, while the demand (you & I wanting gas in our trucks) stayed the same.
The refineries are desperately trying to keep up with our demand for gas, even as a war in Ukraine puts pressure on global oil and gas reserves.
But aren't gas prices going down now?
The prices at a Sinclair gas station in Missoula on July 6th. Before the Fourth of July weekend, they were at least .06/gallon higher.
We may see some more relief at the pump this summer, but the price of fuel is directly linked to the ̶r̶-̶w̶o̶r̶d̶ donut.
- When the Fed spiked interest rates, it slowed general economic activity and lessened demand - leading to lower prices this week
- Stock market traders looking to make a quick happy buck are "shorting" energy company stocks, betting that the low economic activity will further devalue the energy stocks. So far, it's working.
No matter where we place the blame, we can only hope for lower prices for working class Montanans. The money we could save will come in handy as Griz and Bobcat students return for the fall quarter, as well as padding savings accounts for the holidays.