Still up, but going down
Passing through Ashland on Tuesday in route to Tucson, Ariz., Jim Griffith had reason to smile about the recent change in gas prices across the nation. It now costs him only $160 to fill his 36-foot recreational vehicle's 60-gallon diesel tank. Just a few months ago it cost closer to $200.
Prices have fallen about 70 cents on average in Oregon over the last two months.
The celebration is a bit tempered for Southern Oregon drivers. Gas prices here are still higher than the more metropolitan areas of the state because of delivery costs, according to Elliot Eki, a fuel prices expert with AAA motor club.
Ironically, it takes gas to get gas.
Fuel is literally trucked into Rogue Valley from the southern terminus of the Olympic pipeline in Eugene, he said. The additional transportation costs make gas prices more expensive here.
"Those costs are passed down to the consumer," Eki said. "Those rigs go through a lot of diesel."
The average price of gas in the Ashland/Medford area on Tuesday was $2.71 a gallon. In Portland it was $2.64, in Salem it was $2.64 and in Eugene it was $2.66.
That is not to say those to the north are getting a bargain though, as the average price of a gallon of gas in Oregon ($2.68 per gallon) is the fifth highest in the nation — cheaper than only Washington ($2.69), Nevada ($2.71), Alaska ($2.88) and Hawaii ($3.08).
"We're even higher than California," Eki said, noting that Oregon's neighbor to the south typically has the second highest gas prices in the country next to Hawaii.
Fuel prices are typically high in Oregon, Eki said, because of the state's remote location. Crude oil is shipped from the Gulf of Mexico, through the Panama Canal and up the West Coast to Anacortes, Wash., where it is processed into automobile gas. Most other parts of the nation are connected to the gulf region by pipeline, defraying delivery costs.
Nevertheless, like the rest of the nation, the price of gas is down considerably in Ashland. The area reached a high on Aug. 28, when the average price of a gallon hit $3.42. In just two months, the price dropped by $.74.
"That's a pretty good drop in two months," Eki Said.
At gas stations around Ashland, employees and customers suggested the drastic reduction in gas prices is a result of election-year politics.
"It's because George W. Bush wants to say he made gas prices go down," Ryan Perman, who works at the Pit Stop gas station on Lithia Way, said.
But Eki said there are other economic factors that are contributing to the price plummet. He said the demand for gas is down in the colder months versus the warmer ones, and federal EPA standards allow for less refined gas in the winter than in the summer because of seasonal air quality regulations. He also said the slower-than-expected hurricane season in the southeast U.S., and the relative calm in the Middle East, are keeping prices from escalating more.
"Things have been pretty much going in our favor as far as gas prices go," Eki said, noting that the price for a barrel of crude oil has been static at $60 a barrel for the past several weeks and the US is not tapping into its strategic reserve at this time.
He said consumers can expect prices to continue to drop until the holidays, where they should remain until the spring season drives prices back up again.
"We expect prices will bottom out at Thanksgiving and stay there for the rest of the year," Eki said. "In the spring they will start to go back up again."
Staff writer Robert Plain can be reached at 482-3456 x. 226 or bplain@dailytidings.com.
