Consumers gain, suppliers neutral on gas price drop

10 26, 2012 by Daily Advertiser

The price for a gallon of gasoline dropped 11 cents in a week in Lafayette, falling to an average of $3.45, according to AAA. That was both good news for consumers and not a concern for local oil companies, industry experts said.

Macro Oil manager Clyde Guilbeau oversees much of the company's oil and gas transportation operations.

"For us, it's just, from our perspective, the prices go up or down, you're still having to haul it," Guilbeau said. "As long as the product is still out there, the price of the product doesn't affect us up or down."

Falling oil prices, rising supplies of gasoline and a switch by refiners to cheaper winter blends of gas have contributed to lower pump prices. Gas prices nationwide dropped 14 cents in a week and 21 cents in a month, more than Lafayette's drop of 16.7 cents in a month.

"When the price of oil drops, that's our revenue stream. But it depends on how much it drops now. We have all these little normal fluctuations with oil prices," ssaid Don Briggs of the Louisiana Oil and Gas Association.

The price per barrel closed at $86.05 a barrel in New York on Thursday, according to the Associated Press. It hovered around $92 a week ago. That drop was not severe enough to make any damage, Briggs said.

As long as the price per barrel stays between $75 and $105, local oil and gas companies should be fine, said Richard Metcalf, director of environmental affairs for Louisiana Mid-Continent Oil and Gas.

Every year, oil companies roll out cheaper winter blends beginning mid September and naturally, demand lessens at the end of the summer.

"This is kind of a traditional time of the year for gasoline prices to fall," Metcalf said. "It's just a natural cycle that we experience just about every year."

Producers fear hurricanes less at this time of the year, Metcalf said.

And although the prices at the pump have dropped drastically over the past week and month, prices are still higher than they were this time last year.

On Oct. 25, 2011, a regular gallon of gasoline was $3.35 in Lafayette and $3.45 nationwide, compared to $3.45 and $3.60, respectively, now.

AAA expects that gas prices across the country will continue to drop leading up to Election Day and will move even lower approaching the end of the year, barring any unforeseen forces, according to a news release.

In 2011 the national average price on Nov. 6 was $3.41 and the price on Thanksgiving was $3.32, according to AAA.

AAA expects that the national average is likely to be between $3.40 and $3.50 when American's head to the polls in just over two weeks and to be between $3.25 and $3.40 by Thanksgiving.