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Gas prices fall, clerks, official say why: Price at the pump varies with a number of factors
Southwest Missouri gasoline prices are like the weather. They change instantly and you might or might not like the results.
Judging from the rate at which motorists are buying gas in Nevada, they are enjoying the big drops the city has recently experienced, though some say it is still much cheaper elsewhere.
The Daily Mail interviewed local convenience store clerks and an official of the Missouri Department of Natural Resources in Jefferson City.
Prices were uniform across town Tuesday at $3.09.9 per gallon for regular unleaded, $3.23.9 for unleaded plus and $3.37.9 for premium at the Hot Spot, Cash N' Dash, Tobacco Shack and Fastrip convenience stores.
The basic grade had fallen from $3.26.9 in nine days with several interim decreases, including two Nov. 21 at the 1811 N. Ash St. Fastrip, where clerk Brenda Phebus said changes are made upon phone calls from Murphy USA in Lamar and local store managers.
"It could change again tomorrow," said Phebus. "I wish they'd drop it again."
A Cash N' Dash clerk at 1518 E. Austin Blvd. said the owners "base it on what they have to pay.
"A lot of our problems are with the middlemen, the ones that deliver gas," he said. "We only make a penny or two a gallon."
A third clerk who asked that her store not be identified said "there appears to be no rhyme or reason.
"What we sell is from the Jasper pipeline and we don't know till the last minute when it jumps up or down," she said. "A lot is driven by the stock market and the price of oil per barrel.
"What we sell is not branded."
The MDNR's John Buchanan, senior fossil fuels planner in the department's energy division, detailed a complex scenario with "branded" and "unbranded" fuels as factors.
Crude oil rose worldwide from $79.68 a barrel Sept. 7 to $89.34 Oct. 7 and is fluctuating between $93 and $98, Buchanan said, with disruptions in Libya, Iran and North Africa combining with growth in domestic American oil supplies and an early wintertime demand decrease.
"Gas prices are predominantly driven by the price of crude oil and contracts for up to 18 months with the physical and contract holders," he said. "But there is not always a direct correlation.
"Delivered products like gasoline, diesel fuel and fuel oil have all been pressured downward. It's the teeter-totter effect and there could be a revelation that takes place one way or the other in a day."
Buchanan was asked why prices vary so much around Missouri, ranging on Nov. 25 from the high $2.80s to low $2.90s in the St. Louis area to $3.49 at Ste. Genevieve 60 miles south of St. Louis and the mid-$3.20s to mid-$3.30's at Branson.
"It depends on how many wholesale distributors you have," he said. "If you have one distributor who sells to one or more of the local retail outlets, the price is based on which stations buy more or less fuel and what the contract status is.
"Unbranded outlets don't buy on contracts but in the on-the-spot market in cash or on four to 10-days' credit. If you have diverse ownership in an area, you have more competition and that helps in terms of cost."
Buchanan said St. Louis also differs from Nevada in that it is a federal "non-attainment area" in which only special fuel designed to be cleaner may be sold
So what's in store for the future?
"The national average in the U.S. is at its lowest since Feb, 25, but remains at record highs for this time of year," according to GasBuddy.com Senior Petroleum Analyst Patrick DeHaan. "While the downtrend in gasoline prices has certainly been welcome news for motorists, I see the trend short lived, and believe we may see continued volatility in the days ahead, but even with said volatility I do expect many Americans will see average prices between $3.25-$3.50 for the rest of 2011," he added.
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