Low fuel prices, more spare change for local consumers

As Creston resident April Evans finished filling her Chevy Silverado with fuel at Creston BP Wednesday afternoon, she compared her total to the prices she had been seeing at the pump fewer than 18 months ago.

“It’s about half of what we were paying,” she said. “When it was up that high, you kind of questioned whether you needed to be running to Des Moines for everything or, you know, you carpooled more.”

But now, she said, these lower prices are freeing up some extra cash.

“We travel a lot for our kids’ games, and it sure helps,” she said. “You don’t think quite as hard before you go somewhere.”

Evans is among many Iowa residents welcoming the decreasing fuel prices, which have dipped to their lowest totals in seven years.

According to gas price analysis website GasBuddy, fuel prices in Iowa are averaging $1.95 per gallon today — a far cry from the $3.50 gasoline Iowans were seeing in late 2014, or the $4.02 gas they were buying mid-2013.

According to the signs above Creston fuel stations this morning, unleaded fuel is at $1.83 per gallon. Diesel is at $1.91.

While prices like these are helping consumers stretch their dollars a little further, Robert Schlapia, who owns the Diagonal-based R K Fuels and sets the gas prices for Jerry’s Sinclair in Diagonal, said he’s been selling more fuel this winter, too.

“People are going farther,” Schlapia said. “It’s wintertime, and we always see a big jump in the winter. Of course, they’re also asking, ‘When you going to go down another 10 cents?’”

Budget boost

Lower fuel prices have also been helping keep transportation costs low for school districts. Bob Beatty, Creston Schools transportation director, said this winter has resulted in significant savings for his fleet, which travels more than 240,000 miles each school year.

“(Fuel expenditures) are down substantially,” Beatty said. “Right now my budget’s strong just for that fact.”

In the 2014-15 fiscal year, Beatty said Creston Schools saved $5,894 in gas and $19,195 in diesel. This year, as prices have dropped even further, Beatty’s 2015-16 budget continues to reap the benefits.

On the county level, engineer Steve Akes said the current fuel contract, which was signed Dec. 28 and began Jan. 1, should save the county at least $100,000 this year. The county budgets for 90,000 gallons of diesel and 14,000 gallons of gasoline annually, Akes said. This year’s contracted prices are $1.70 and $1.72 per gallon, respectively.

“It’s definitely going to look good on the budget,” Akes said.

Akes said low fuel prices not only help county vehicles consume fewer dollars, but as local consumers purchase more fuel, the county also receives more fuel tax money.

“Our biggest source of income is fuel tax, and people tend to buy more fuel when it’s cheaper,” Akes said. “We get hopefully a little more income and a little less expense. It may not be too drastic, but it does make a difference. That’s probably going to help us a lot this year.”

Springtime climb

But how long will these low prices last?

Schlapia said it won’t be too much longer before they start to creep upward again.

“I say the bottom’s just about here,” he said. “The cost of refining, and all that stuff — you know it’s there.”

Schlapia said the transition from winter-blend to summer-blend fuel in the spring will cause fuel prices to grow again. This switch, which keeps the fuel in automobiles from evaporating as quickly in the hot summer temperatures, is mandated by the Environmental Protection Agency and costs more to produce.

However, even with this rise, GasBuddy predicts 2016’s peak price will be lower than 2015. In a yearly gas price outlook released last week, GasBuddy also predicted the yearly national average will be $2.28 per gallon in 2016, 12 cents below last year’s average of $2.40.

Another spike?

Looking further into the future, GasBuddy senior petroleum analyst Patrick DeHaan said the end of the year could see the beginning of another climb.

With oil prices now just over $30 per barrel, DeHaan said low market prices are beginning to cause some layoffs. While it’s hard to project an exact date, DeHaan said he anticipates gas prices will rise again.

“I would caution motorists who are enjoying low gas prices because the lower oil prices go today, the more likely they will slingshot higher in the years ahead,” DeHaan said.