Idahoans can look forward to a break in gas prices this Labor Day weekend, with prices at the pump predicted to be the third lowest they’ve been in the past decade, behind prices in 2015 and 2016. This past week, gas prices in Idaho have dropped by 3 cents and are expected to continue to go down throughout the fall.
Patrick DeHaan, head of petroleum analysis for GasBuddy—a crowdsourced company that collects real-time fuel prices in the U.S., Canada and Australia—said that even though in the short run low gas prices are nice for consumers at the pump, the big picture could be a lag in the overall economy.
DeHaan explained in an interview that when consumers are spending and the economy is growing, petroleum prices are higher, but that when gas prices begin to dip, concern over a recession rises, because it also indicates that consumer spending is down and therefore the economy in general is on the decline.
For drivers, the low gas prices are a “bright spot in a cloudy situation,” DeHaan said.
In a media release from GasBuddy on Monday, DeHaan said gas prices today in Idaho are averaging $2.78, 44 cents lower than a year ago. On a national scale, gasoline has fallen 2 cents per gallon in the past week and is 25 cents lower than it was a year ago. In addition, DeHaan said the continued tariff war with China will play a role in keeping prices low this fall.
“Fall will bring plenty of falling gas prices, so long as there remains turmoil between the U.S. and China,” he said.
If a trade deal is negotiated, DeHaan said, the falling prices could reverse and begin to rise again, but that if not, prices will likely continue to go down. Furthermore, beginning Sept. 16, many petroleum producers will begin to make their winter blend—a cheaper-to-produce blend of gasoline made to evaporate at a lower temperature—that will continue the decrease at the pump.
“For now six straight weeks we’ve seen the national average price of gasoline decline, and after last week’s escalation in the trade battle between the U.S. and China, it’s possible that the streak continues longer than previously anticipated as oil markets react to the news, sending oil lower,” DeHann said.
A GasBuddy study conducted in August, using data from the U.S. Department of Labor, shows that Idahoans have to work an average of 107 hours to pay for their annual gasoline expenses. While Idaho is third in comparison to neighboring Nevada at 108 hours per year and Montana at 107.4 hours per year, it is still well above the U.S. average of 88.9 hours a year.