Lower oil prices could help school system budget as well
LYNCHBURG, Tenn. — Motorists in the southeastern United States traveling over the Labor Day holiday were greeted with the lowest gas prices in a decade. The current state average prices of $2.31 in Florida and Georgia, and $2.17 in Tennessee are $1.06, $1.02, and $1.04 cheaper than the price during last year’s holiday respectively.
“Low gas prices (were) an added incentive for Americans to take a road trip this Labor Day weekend,” said Mark Jenkins, spokesman, AAA – The Auto Club Group. “Low gasoline prices are an added boost in disposable income, giving travelers more money to spend on lodging, shopping, and dining out.”
As local residents returned to work and school on Tuesday morning following the three-day weekend, fuel prices remained low. At Woodard’s Market here in Lynchburg, the cost for a gallon of regular unleaded was $2.14, while it was $2.21 just across the street at the local Bedford-Moore Co-op.
At Lynchburg Jiffy Mart on the corner of Route 82, the price for a gallon of regular unleaded gasoline was $2.19.
Last week, the price of oil dropped below $40 a barrel, the lowest settlement price since February 2009. During that time, the national average price of gasoline averaged $1.90. However, oil rallied toward the end of the week, settling at $45.22.
“The price of oil steadily climbed toward the end of the week due to a strengthened U.S. economy. However, analysts expect the oil glut to continue through the rest of the year, preventing any major spikes in oil or gas prices. Motorists will likely continue seeing gas prices move toward $2 or below through the rest of the year,” Jenkins said.
The current national average price of gasoline is $2.48 — 12 cents lower than a week ago, 19 cents lower than a month ago, 95 cents lower than this time last year. The current Florida average price of $2.31 is 7 cents cheaper than last week, 23 cents cheaper than a month ago and $1.06 from a month ago. The current Georgia average of $2.31 is 8 cents lower than last week, 21 cents lower than last month, and $1.03 lower than this time last year. The current average price of $2.17 is 9 cents lower than last week, 20 cents lower than a month ago, and $1.05 lower than this time last year.
Meanwhile, the price of diesel fuel is considerably higher than regular gasoline, but well below last year’s average nonetheless. That’s good news for U.S. truckers and for American consumers, including local farmers as well as the Moore County Board of Education.
With 14 buses in service running regular routes, lower fuel prices could help the school system’s budget. But Director of Schools Chad Moorehead said it takes a while for the savings to trickle in. With the budget set for the year, a slight fluctuation of diesel fuel upwards could wipe away any short-term savings.
“When we budget for fuel we kind of base it on previous years. I look back and see the trend over the last three years or so,” said Moorehead. “Last year we were fortunate that we had budgeted enough.
“For the most part I will leave that diesel line (item) in place and if we don’t spend it all, it just rolls into next year’s budget. The cost of fuel can fluctuate from month to month. I don’t look at it in February and say, ‘hey, we’re below what we budgeted so we can spend that on computers,’ because fuel can go back up.
“While it may go down this month, it may more than triple next month, which I know is an exaggeration. We may be talking about (saving) $3,000.”
While it’s hard to say just how low the retail price of diesel will go, what is fairly certain is the trend line in place since last autumn will continue to run its positive course at least through the rest of the year. What’s more, most experts say it looks like the price of diesel won’t rise markedly until 2016. And at that point, it’s expected to increase to an average well below that recorded in 2014.
According to the U.S. Energy Information Administration, the retail price of diesel fuel, which averaged $3.83/gal in 2014, is projected to fall to an average of $2.88/gal in 2015 and then rise to a $3.12/gal average in 2016.
AAA updates fuel price averages daily at <http://www.fuelgaugereport.aaa.com>. Every day up to 120,000 stations are surveyed based on credit card swipes and direct feeds in cooperation with the Oil Price Information Service (OPIS) and Wright Express for unmatched statistical reliability. All average retail prices in this report are for a gallon of regular, unleaded gasoline.