The Herald Bulletin

Afternoon Update

Local News

July 16, 2012

Gas prices drop to under $3 a gallon

Prices are varied, but many local stations are lower than Indianapolis

ANDERSON, Ind. — Erica Hensley does her homework before filling up her gas tank, and with the recent drop in prices, she kept her eyes peeled for the best possible deal.

Over the weekend, and as of Monday evening, many gas stations in Anderson had dropped their prices below $3 per gallon.

And on Monday, Hensley, 24, made sure to bypass some gas stations and cities in order to reach the Ricker’s at 840 S. Scatterfield Road where regular gas was going for $2.95.

A search on GasBuddy.com, a website where people can post and view recent retail gasoline prices, showed that a dozen gas stations in Anderson were selling gas for $2.95 to $2.97 a gallon on Monday afternoon.

Many other stations in the city and in Indianapolis, though, had not joined the trend and were still selling gasoline at $3.07 to 3.27 a gallon.

Those prices reflect updates that were posted by Web users in the prior 24 hours; therefore, some of those prices could have changed.

Hensley, an Alexandria resident, drives regularly to Greenwood, Indianapolis and Muncie, so she always looks at gas stations’ signs when she’s out. She also uses the Gas Buddy application on her phone to check prices every few days.

And she typically purchases gasoline on Thursday mornings because she has noticed prices go up Thursday evenings or Friday mornings, likely because companies know that’s when most people get paid, she said.

But after driving through Anderson this weekend and seeing the latest below-$3 prices, she didn’t want to wait.

“It’s like bargain hunting,” she said.

A drive around Anderson showed the downtown Marathon selling gas at $3.27, the downtown Ricker’s at $3.05 and a Speedway at Scatterfield and Seventh Street at $2.95.

Hensley said she saw gas going for $3.17 in Alexandria on Monday and $3.30 in Indianapolis on Sunday. And she noticed that several gas stations in Anderson had the cheapest gas she had seen in a while, so she made sure to take advantage of that.

“I think it’s kind of absurd,” she said of the big difference in price tags. “We were just talking about that at work. We would like one universal price.”

Angelia Graves, a spokeswoman for Ohio-based Speedway, said there are a lot of factors that determine the price of a gallon of gas.

Among the pieces of the puzzle are the cost of taxes, refining and transportation. But the component that plays the biggest role is the cost of crude oil, Graves said.

“That fluctuates depending on the different refiners, where we get the crude oil from, and what prices they are paying,” she said.

“Crude oil prices have been fluctuating up and down for the last month,” she said. “We have seen it go in both directions. In general it has been below where it was at the beginning of the year.”

Another piece that plays into prices is competition and what other local gas stations are offering. According to GasBuddy.com, five Speedway stations in Anderson were selling gas for less than $3.

Some gas stations, although part of a national company, are owned by individual people. They make the decision every day about what price they are going to sell their gas for, Graves said.

But with Speedway, all stations are still owned by the corporation, which sets the prices. Facility managers, though, perform competitive analysis to determine if prices should be adjusted in specific areas, Graves said.  

Local prices also change due to supply and demand, she said. Currently, demand has decreased, which has helped drop prices.

But consumption is expected to grow, which could lead to an increase in prices.

“The world’s demand for oil increased sharply for several years, peaking at 86 million barrels per day in 2007,” according to the American Petroleum Institute website. “However, the global economic slowdown in recent years reversed this trend and demand fell for two consecutive years to just 85 million barrels per day in 2009, or nearly one million barrels per day less than at its peak before rebounding in 2010.

“The Energy Information Administration expects growth to accelerate over the next two years reaching 89 million barrels per day in 2012 and nearly 90 million barrels per day in 2013,” the website stated.

According to GasBuddy.com, the last time the average gas price was below $3 in Indiana was in late 2010 to early 2011.

“It’s great,” said Aaron Hendrickson, 39, Anderson, as he pumped fuel at $2.95 per gallon into his truck at a Ricker’s. “I’ve been topping it off every time I can. It’s been a long time since it’s been below $3. It usually goes up in dollars and down in pennies.”

Find Melanie D. Hayes on Facebook and @MelanieDHayes on Twitter or call 648-4250.

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