The Woodward News

December 28, 2013

Good, bad news on gas prices for 2014

Rachael Van Horn
Woodward News

Woodward, Okla. — While local consumers have been enjoying the lower prices at the gas pump, the news for the coming year is - sorry to say - not very good, according to well known online consumer advocate and watchdog, GasBuddy.com.

GasBuddy.com offers its members a chance to understand better the confusing fuel markets and why prices at the pump are so volatile. The service also offers a peek at the best prices around the country, allowing consumers to plan and save while traveling.

This year, the news from GasBuddy analysts is sort of dark, tinged with a little creamy goodness, according to Gasoline Price Analyst Patrick Dehaan.

The bad news for consumers is some in Congress are calling for a 15 cent raise the federal tax rate per gallon and some states may also raise their taxes on a gallon of gas, Dehaan said.

At present, the United States Excise tax on gasoline is 18.4 cents for regular unleaded.

On average, through 2013, state and local taxes add about 30 cents per gallon for an average of about 49 cents per gallon that a consumer is paying  in taxes alone when they fill up, according to the U.S. Energy Information Administration.

If both the feds and the states add more taxes, it could signal an increase in gasoline prices of as much as 25 cents at the pump and that is before considering any natural volatility associated with gasoline production itself, Dehaan said.

Oklahoma is unlikely to see an increase in state taxes this year, Dehaan said, but that's not the case in several other states.

Consumers in Arizona, Alaska, California, Connecticut, Florida, Hawaii, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Nebraska, New York, Oregon, South Dakota, Vermont, Virginia, Washington DC, and Wyoming all saw their state gasoline taxes change already, he said.

But here is the good news. Despite all of that, Dehaan suggests that at the end of 2014, when all the figures are compiled, he predicts the average price a U.S. consumer pays at the pump will still be lower by about 10 cents than the average price they paid in 2013.

Still, Dehaan said in 2014 consumers need to plan for some pretty wild price swings as well as some pretty large price spreads between retailers, even in small towns.

That's because some major companies are invested in product differentiation (additives, etc.) as well as loyalty tie-ins with major grocers and other merchandisers, he said.

Meanwhile, other independent gasoline marketers stress a lower price point, some almost to the break even point, he said.

Adding to the already messy mix of possible higher gas taxes and swinging retail price of gas, shallow U.S. inventories of gasoline will also create a situation where prices could react quickly to news of an event that could affect energy production, he said.

Thats because the U.S. is seeing far fewer imports of refined gasoline and now it is even exporting some of its refined product.

According to Dehaan, states in the Midwest, where refineries have been recently upgraded, could see lower prices throughout 2014 than other states.