Dropping pump prices providing some relief for inflation-battered consumers
It’s going to take a while to get over the sticker shock of $5 a gallon gas prices from earlier this summer.
But, in fact, experts are confident the worst is behind us, barring any crippling hurricanes in the Gulf region or an escalation of war in Europe.
“We’re not out of the woods yet with global geopolitical tensions and hurricane season upon us,” said Patrick De Haan, head of petroleum analysis for GasBuddy, “But we could at least continue to see declines over the next several weeks.”
And pump prices, which have been declining for more than 50 straight days, could continue to drop as peak summer travel season ― and higher demand ― will soon be winding down for the year, said Michael Hicks, an economist at Ball State University.
In South Bend, the average price for a gallon of regular crested at $5.23 in mid-June, which was about the statewide average in both Indiana and Michigan, according to GasBuddy. As of Monday, the average price for a gallon of gas had fallen to $3.87 a gallon, more than a $1 less than mid-June but still nearly a $1 higher than it was a year ago.
At the pump
And that wasn’t lost on consumers filling up last week at Rick’s Auten Road Amoco in South Bend.
“It’s better,” said Connie Kuzydym of Michigan City. “But for the average person, prices are still exceedingly high.”
Especially, with the price for almost everything else up as well, she added.
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Tony Corr of South Bend said the high prices earlier this summer had him making more trips to the service station to put in whatever he could afford to feed the pickup truck that he needs for work. “I think they’re only down because of the midterm elections,” he said.
Only time will tell whether lower pump prices, abortion rights and legislation affecting climate change and health care impacts the upcoming elections.
But Marta Brummell, who also was filling up at the Amoco station, said it’s good to see any price relief ― especially for those who have really been struggling to make ends meet with higher prices for just about everything because of inflation.
“I was still filling up as needed,” said Brummell of Niles. “But I was trying to be more thoughtful and intentional.”
Widespread impact
Despite conventional wisdom, station owners also are thrilled to see prices subsiding, said Scott Imus, executive director of the Indiana Food and Fuel Association, a trade group representing more than 80% of the retail fuel that’s delivered and sold in the state.
“When prices are going up, operators resist increasing prices because they risk losing customers,” Imus said. And at the same time, cash-strapped consumers might cut back on purchases of lottery tickets, chips, pop and other items inside the station because they're already suffering from sticker shock at the pumps.
“The only big winners are the credit card companies because of their fees and the state because of the taxes they collect,” Imus said.
With lower pump prices, motorists as well as station owners are likely to feel some relief. But lower fuel prices should eventually spread into other areas that could help bring down inflation, Hicks said, pointing out that trucks are used to move most things to the market.
“If the cost to move produce to the grocery store is down, prices for those items should follow,” the Ball State economist said, adding that the Federal Reserve’s actions to tame inflation by boosting interest rates are starting to have a positive impact.
“I think we’ve seen the worst of inflation,” he said. “But I don’t have a lot of faith that we’ll dodge a recession. It’s very difficult to engineer a soft landing.”
Though, he added, he also doesn’t see a very deep or very prolonged recession.
“If we have a recession, we’re going into it strong,” Hicks said. “For most people, it might hardly be noticeable.”
This article originally appeared on South Bend Tribune: Lower South Bend-area gas prices already providing relief to consumers
