Expert: Gas prices may drop in coming weeks
The spike in fuel prices may have caused some families to think harder about their summer travel plans, but good news could be on the horizon.
“Oddly enough, gas prices are actually going down a little bit at the moment,” said Alabama AAA Spokesman Clay Ingram.
And, though he can’t say for certain, prices could continue to go down by as much as 50 cents in the next few weeks.
“AAA doesn’t really make predictions like that. There are so many different factors so there’s really no way to predict any kind of specific price point,” Ingram said. “I think we could and should be in line for a significant price drop. Could it be 50 cents? It could be. It could be more than that, honestly, could be less than that.”
Some of these factors, Ingram said, are due to Wall Street investors panicking over the situation in Lybia. “A lot of investors have been anxious about the situation in Lybia, concerned that situation might escalate,” Ingram said. “Obviously that has not happened, and I think the investment world is starting to accept that.”
Crude oil prices have dropped this week down to around $95 a barrel, where they were at $114. Ingram said he believes they should drop to between $70 and $80.
“The state of our economy plays a big part of this,” Ingram said. “The more people are out of work, the less our demand is going to be. I’m cautiously optimistic.”
Regardless of what predictors say, Ingram said there are some powerful tools drivers have to help prices decrease.
“The first is fuel conservation, and we are actually doing a pretty good job right now. We typically do when prices get this high,” Ingram said. “Believe it or not, that does have and is having a pretty big impact on what we pay for gas. If we were not cutting back, prices would be at $4 per gallon, but we’ve been able to stay below that in Alabama.”
The second tool is shopping for the lowest fuel prices. “That one we are not using at all, and it is equally as powerful, if not more powerful,” Ingram said.
Though a few cents may seem it would not make much of a difference, Ingram said the impact can actually be quite significant.
“If we were price shopping actively, we might save $1 to $2 on this tank of gas, but a week from now, we might save $5 and a month from now we might save $20 on a tank of gas,” Ingram said. “There is no reason not to do it. You win either way. You save money now, and you might save more later.
“If we ignore the prices like we are doing currently, that sends a message to the oil companies, ‘Just charge us whatever you want to charge us,’” Ingram said. “But if we price shop, that sends the message that says, ‘Look, we really do have to buy gas, but we will buy the cheapest price we can find.’ The end result of that is we will reintroduce competitive pricing back in this … and we’ll see prices go way down.”
Though some residents may not be price shopping, others have been shopping for more fuel-efficient vehicles, say local car dealers.
“My used car lot has a lot more full-size trucks and SUVs than it ever had,” said Jim Jackson, of Bill Jackson Chevrolet. “Small car sales are up a bit. People are actually asking about fuel mileage now, where most of the time that question doesn’t come up.”
Mike Kilcrease, general manager of Ken Cox Ford, said the demand has increased for more fuel-efficient cars but not to the same extent as they had last time fuel prices reached the $4 mark.
“It seems people haven’t panicked this time,” Kilcrease said. “I think we’ve just been there, done that. It’s happened before, happened again, maybe it will go back down. If you’ve got a large family, and you’ve got to have an Expedition, you’ve got to have it.”