Fuel prices stubbornly high around Northwest

Much of nation should see cheaper prices into summer

By Gordon Oliver, Columbian business editor

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Gas prices are dropping dramatically in much of the nation, but the cost of fuel is trending down far more slowly in the Northwest, including the Vancouver-Portland area, AAA Oregon/Idaho reported Tuesday.

The national average for regular unleaded dropped nearly a nickel this week to $3.76, about 17 cents lower than a month ago. Oregon’s average remained at $4.02 and Washington’s increased by a penny to $4.08, said Marie Dodds, AAA Oregon/Idaho public affairs director. Vancouver’s average price held steady at $4.04 for the week, but the price has dropped by 10 cents in the past month.

Even better news for those ready to hit the road: The federal Energy Information Administration on Tuesday slashed its forecast for average gas prices to $3.79 per gallon for the summer driving season, a seemingly conservative estimate given the new AAA report. That prediction is down from an initial estimate of $3.95 and below 2008’s record average of $3.80.

Many factors are contributing to the ease in gas prices, from the European financial crisis that reduces overseas demand to the increased fuel efficiency of automobiles. But a central factor is that Americans are simply spending less time on the road. “There’s a downward trend, and driving is at a five- to 10-year low,” Dodds said. “People are driving less across the board.”

Historically gas prices peaked around Memorial Day weekend. Last year the peak hit on May 5, and was followed by price drops on 50 of the next 54 days, according to AAA. Prices then stabilized 44 cents below the peak, AAA reported.

This year’s price peak was April 5. Nationally, prices have fallen since then for 22 consecutive days and all but three of the past 31 days.

Prices remain higher in the Northwest, a typical pattern made worse this year when a fire forced a shutdown of the Cherry Point refinery near Blaine. That closure put a crimp on fuel supplies, and the refinery only recently reopened.

But the bigger trends that are continuing to affect prices are at the national and international level. The turmoil in European economies has the potential to weaken demand for gasoline. Meanwhile, crises in the Middle East that had threatened to disrupt oil supplies have eased for now.

One big question is whether lowered prices will trigger more driving and more purchases of SUVs and larger, less fuel-efficient vehicles. After all, previous spikes in gasoline prices have led to countless declarations that Americans would curb their fuel consumption, only to be followed by rising prosperity, pocketbook accommodation to higher prices, and a new wave of increased travel and big-car purchases.

Dodds, of AAA Oregon/Idaho, says her organization’s surveys over decades have asked motorists how high prices would have to rise before they would change their ways. In the first surveys, people said they would curb driving when prices hit $1 a gallon. But prices kept going up and people kept driving more, she said.

“It really wasn’t until 2008 when gas hit $3.75, that people began making conscious changes in their behavior,” she said.

“We do seem to be in a pattern when people have short-term memory losses in terms of gas prices,” she added. “It is hard to say if changes in behavior will be permanent.”

The Associated Press contributed to this story.