Gas Prices Down, But Why? And For How Long?

By: Tony Tagliavia
By: Tony Tagliavia

This time around, the big numbers are coming down and the little ones are going up. It's happening around mid-Michigan and It's a big surprise for drivers like John Schiessler.

"This much. This fast. I didn't expect it completed to how it's been over the last few months," Schiessler said.

He figures it's costing him about $5 to $8 less to fill up his Chevy sedan this week. Michigan AAA reports prices for regular unleaded in and around Lansing are down about 15 cents a gallon from last week and down 47 cents from the same time a year ago.

Marc Thrower is reaping the benfits of those savings. It's now about $10 cheaper to fill up his Hyundai SUV than it was just a few weeks ago. But why?

"Probably coming near election time, I guess," Thrower said.

We asked a Michigan State University economist to explain the reasons behind the drop.

"This isn't a great conspiracy. This is ordinary economic factors that we're talking about," Charles Ballard said.

Ballard says those ordinary factors include the end of the peak driving season and a slightly calmer Middle East. And he says there's one more big reason.

"We haven't had a Katrina. All it would take would be one hurricane like that and the prices would be up again," Ballard said.

Things other than a hurricane, like a refinery fire or a pipeline disruption, could have the same effect.

If there's no catastrophy, Ballard says prices will rest on the temperatures this winter. If it's colder, that means more demand for heating oil -- putting pressure on prices at the pump.

Pressure customers say they're ready for.

"It'll always go up," Schiessler says.


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