Average gas prices have fallen below $3 a gallon in Minnesota, Wisconsin and the Dakotas, encouraging more drivers to hit the road for the Thanksgiving weekend since 2007.
In Minnesota, the average price was $2.79 this week, according to AAA, with some stations in Bemidji and Twin Cities suburbs reporting prices as low as $2.55, and the lowest price since the fall of 2010.
The current average price in Wisconsin was $2.89. Among the state’s metro areas, Milwaukee has the lowest average price at $2.84, down from $3.18 a month ago.
For the first time in four years, the average price for gas in North Dakota has dropped below $3 per gallon, and that price could be here to stay, officials said. North Dakota gas stations reported an average of $2.99 per gallon this week, dropping 18 cents from a year ago, according to AAA.
South Dakota’s AAA was reporting a statewide average pump price of $2.89, down 25 cents from late November of last year.
Some stations have noticed drivers filling up their vehicles without hesitation.
“They’re loving it,” said Kim DeLong, manager of the Holiday Stationstore in Pine River in north-central Minnesota. “They love that the price is going down and they say it shouldn’t have been up anyway.”
The national average Thursday stood at $2.85 per gallon for regular unleaded fuel, 36 cents lower than the average price for this same date one year ago. It marked the lowest gas prices for the nation in four years — the national average was $2.89 per gallon on Dec. 2, 2010. Gas stations have stayed below the $3 mark for 17 days.
South Carolina had the lowest prices at $2.62 per gallon. Hawaii was the highest at $3.95.
According to the website gasbuddy.com, Minnesota ranked No. 14 for gas prices, with South Dakota at 24th and North Dakota at 37th.
In part because of the lower prices, AAA South Dakota projects 151,800 South Dakotans will travel this year over the long Thanksgiving weekend, the highest volume for the holiday since 2007 and a 4.7 percent increase over 2013.
“We’re expecting South Dakota’s Thanksgiving gasoline prices will hit five-year holiday lows,” said Marilyn Buskohl, spokeswoman for South Dakota AAA. “Lower prices are enabling families to carve out more money from household budgets for travel over the holiday.”
North Dakota AAA spokesman Eugene LaDoucer also noted how the relief is coming in time for the holiday travel season. In past years, travelers may have tried to save money by cutting back on the distance they drove for Thanksgiving or Christmas. This year is expected to be different, he said. Based on research, there is about $250,000 more in the pockets of North Dakotans each day for every 20-cent decline in gas prices.
“(Consumers) are going to find that they are going to have more disposable income this year than they had in the past,” he said.
Nationwide, AAA expects 46.3 million Americans will travel over Thanksgiving, also the highest number since Thanksgiving of 2007 and a 4.2 percent increase over 2013. About 90 percent of travelers (41.3 million) will celebrate the holiday with a road trip, up 4.3 percent, and nearly eight percent (3.55 million) will fly, an increase of 3 percent.
OIL PRODUCTION’S ROLE
The North Dakota oil industry could be a contributing factor to lower prices, LaDoucer said.
“Because of that dependable supply of domestic crude oil, it’s helped to alleviate some of the international pressures that oil has typically seen in the past,” he said. “Now with a dependable supply, it’s led us to these lower prices. Now it’s just a matter of knowing if these prices are going to stick here or whether they will again increase at some point.”
Gas prices are tied closely to the wholesale price of crude oil, which has been on a sharp decline since June. Gas prices have dropped steadily for 53 consecutive days, the longest decline since 2008, according to AAA.
Gail Weinholzer, director of public affairs for AAA Minnesota/Iowa, said there are several other reasons for the price drop. Demand for fuel is often decreased between Labor Day and Thanksgiving.
“Beyond that, we have completely switched over from the summer- to the winter-grade fuel, which costs less to refine,” Weinholzer said.
MORE FOR DIESEL
Conversely, those whose vehicles run on diesel are paying more at the pump than ever before. The average price for a gallon of diesel is $3.96. The reason for this is that most diesel refineries also refine home-heating fuel.
“It is mighty cold out there, and it is mighty early in the season,” Weinholzer said.
However, regular gasoline prices are expected to stay steady, if not decline, until the end of the year.
“Beyond that, it is a little difficult to say because there are so many factors that impact both oil and gasoline prices,” LaDoucer said, adding the Energy Information Administration is projecting a national average price of $2.94 per gallon next year.
“We may be paying near or less than $3 per gallon for gas for the foreseeable future,” he said.
In a bit of irony, the price of gas tends to be higher in the oil patch of western North Dakota cities compared with eastern cities. This week’s prices reflected that trend. Fargo’s average was $2.84 per gallon. Williston came in at $3.10, Dickinson at $3.03 and Bismarck at $3.04.
