TWIN FALLS — Gas prices are significantly higher than they were a year ago, but that hasn’t discouraged Idahoans from traveling for the holidays.
The prices probably won’t keep Donna Barron of Richfield from her travel plans this winter, she said Monday as she fueled up her white sedan at the Maverick on Blue Lakes Boulevard. Barron commutes to Twin Falls for work and keeps a steady eye on gas prices in town.
“We have to watch our budget a lot closer, with Christmas coming,” she said. “When gas prices were so high a few years ago, we didn’t travel.”
As the U.S. economy has come out of recession — and Idaho’s grows rapidly — demand for gas has held steady this winter, with little fluctuations in the region’s supply, AAA Idaho spokesman Matthew Conde said. And most people, he said, don’t begin to cringe until prices reach $3 per gallon.
“These retailers know that,” Conde said.
So at a time when Idaho would typically see winter gas prices drop substantially from the summer high, gas prices have bumped down only 12 cents since October.
“It’s not a supply issue,” he said. “It’s really more of a demand, and with that demand is a willingness to pay.”
In 2014, Idaho gas prices dropped 81 cents from October through December, but that gap has narrowed in consecutive years — 34 cents in 2015 and 17 cents in 2016.
As of Tuesday, the average gas price in Idaho for a gallon of regular gas was $2.64, up 36 cents over that time last year. In Twin Falls, the average price was $2.55 — 35 cents up from a year ago.
Idaho’s average gas price peaked on Sept. 14 at $2.78 per gallon. The lowest price the state had this year was $2.31 on Jan. 3.
But while consumers haven’t seen as much savings at the pump so far, that doesn’t mean that they won’t before the end of the year, Conde said. The Rocky Mountain region is particularly susceptible to huge swings in demand when a cold snap hits.
“The whole thing could jump off a cliff here in a matter of weeks,” Conde said.
Savings of an additional 10 cents per gallon or more by New Year’s isn’t out of the question, he said — but keep in mind that more demand around the holidays could change that.
Cold temperatures Monday kept people from gassing up at a Shell station on Kimberly Road in Twin Falls, one employee speculated. Gas prices there were around $2.59 per gallon. An AAA Idaho survey found that 84 percent of Idaho gas stations were selling gas for $2.51 or more.
At Maverick, Barron was pleasantly surprised to find the price drop from $2.45 per gallon early Monday morning, to $2.41 per gallon in the late afternoon. Tracy Quam, a Twin Falls resident also fueling up there, said she didn’t pay much attention to gas prices and they’d had no effect on her travel plans.
At the Phillips 66 station at Crossroads Point in Jerome, most of the handful of vehicles stopping for fuel that afternoon were from out of town. Russ Wagner, of St. Ignatius, Mont., said he drives to Elko, Nev., every two weeks and usually gets gas in the Twin Falls/Jerome area — typically at a truck stop. The prices here were $2.49 per gallon for regular gas.
“They haven’t been going up a lot,” he said.
Wagner was relieved it was nowhere near the $3.50 per gallon he recalled seeing a few years back, but he also remembered when prices were 50 cents per gallon in the 1970s.
The average price for diesel is also higher than a year ago, but different factors may be playing into it, Conde said. Diesel almost exclusively affects the trucking industry and is affected more by the economy. The U.S. also exports a lot of diesel to Europe because more vehicles there run on diesel.
On Tuesday, the average price for a gallon of diesel was $2.84, 43 cents more than a year ago. In Idaho, that price was $3.09 — up 57 cents from a year ago.
Since 2000, Idaho’s population has grown from 1.3 million to an estimated 1.7 million. But the U.S. growth rate isn’t quite as high, so at the national level, there’s more at play than just demand.
What’s also impacting U.S. prices, Conde said, is record exporting of gas to Central and South America, where refineries run less efficiently.
“It’s cheaper for them to buy our stuff and ship it all the way down there,” Conde said. “One in every 12 gallons we produce is going south.”
As long as there’s another market for U.S. products, that’s going to have an impact on prices nationally.
A recent decision by the Organization of Petroleum Exporting Countries will extend production cuts through the end of 2018. This leaves some unknowns in the equation.
“The cartel’s action was expected, but the strength of the market’s response is yet to be determined,” Conde said in a statement.
In the past, OPEC actions to restrict supply have had a crippling effect on the market, he said. But the U.S. currently exports more than it imports and has become more effective in producing oil. The U.S. has brought on two more oil rigs in a time when domestic demand is usually down.
“There’s a little bit of a face-off here between the U.S. and the oil cartel,” Conde said. “It’ll be interesting to see who blinks first.”
The Rocky Mountain region is somewhat insulated from national fluctuations because it is generally the last region to react to price fluctuations. However, sooner or later the ripple effect will reach Twin Falls, Conde said.
“In the long run, nobody can escape the national trend.”