Lower oil prices should have translated into lower fuel prices, but that hasn't happened in Idaho—not yet, at least—raising questions about the transparency of the refinery and the distribution system that provides gasoline in the region, AAA Idaho says.
The July 4 holiday is expected to match a record number of travelers in the U.S., but Gem State motorists may think twice about hitting the road, given that its average gas price is the sixth highest in the U.S.
At $3.69 a gallon, Idaho's average price for a gallon of regular grade gasoline is 31 cents above the $3.38 national average. Idaho's average has not dropped below that mark since the third week in March, when West Texas Intermediate Oil, the U.S. benchmark futures price was trading at $108 a barrel.
Now, three months later, oil has dipped below $79 a barrel, but Idaho pump prices are now just beginning to move from the year's $3.82 high mark set in May.
"The national average, which peaked at $3.94 a gallon in early April has dropped 56 cents since then, causing even the most casual Idaho observers to ask 'What gives?'" says AAA Idaho Public Affairs Director Dave Carlson.
It's a reasonable question, Carlson says, because it presumes that rising and falling oil prices affect the oil acquisition price refineries pay for their raw product. "If the acquisition price is lower now than it was several months ago, how can Idaho's pump prices not reflect that movement?" Carlson asks.
"We speculate that refinery output and/or distribution functions are constrained or spread thin and that limited regional supplies raise the price retailers and their customers must pay," Carlson said. But he concedes consumers in Idaho's geographically isolated petroleum market never know the particulars.
West Coast gas supplies were constrained earlier this spring with the shutdown of the Cherry Point refinery in Washington State and due to problems at two California refineries. Tight supplies in Oregon and Washington pushed prices to $4.25 and higher.
With resumed normal production now in place, Oregon's average price has dropped 51 cents in the past 30 days, to $3.74 a gallon. Washington's average similarly dropped from $4.27 a gallon a month ago, to $3.73 today.
Record matching travel expected for holiday
AAA says it expects record-matching travel for the July 4 holiday period, as 42.3 million Americans will drive, fly, float or bus their way somewhere else. Lower gasoline prices will benefit the traveling public, but the holiday's mid-week appearance likely has a more pronounced effect on travel intentions.
The travel organization expects 35.5 million, or 84 percent of the total 42.3 million travelers will do so by motor vehicle, a 4 percent increase from a year ago.
The increase in auto travel for Idaho and other Mountain states is expected to be 3.6 percent, compared to the National average of 4 percent. "Economic drivers, including fuel prices, could have something to do with the smaller regional increase." Carlson said.
AAA's traveler intention survey shows visits with family and friends, dining and outdoor activities are high among the purposes for holiday travel by Idahoans.
"Our surveys suggest that a sizable number of travelers will look for ways to economize, taking advantage of lakeside and beach adventures, fishing and sightseeing," Carlson said.
Quick look at pump prices
Here's a snapshot of pump prices nationally, in Idaho and at select Idaho cities:
- U.S., today, $3.38; week ago, $3.48; month ago, $3.64; year ago, $3.57.
- Idaho, today, $3.69; week ago, $3.75; month ago, $3.81; year ago, $3.65.
- Idaho Falls, today, $3.64; week ago, $3.68; month ago, $3.77; year ago, $3.50.
- Twin Falls, today, $3.70; week ago, $3.71; month ago, $3.76; year ago, $3.65.
- Boise, today, $3.68; week ago, $3.73; month ago, $3.76; year ago, $3.69.
- Nampa, today, $3.70; week ago, $3.75; month ago, $3.77 year ago, $3.69.