Gas Prices Continue to Tumble
The wild ride continues for gas prices in Delaware. AAA is reporting that the average fuel cost for unleaded regular is $2.016. The highest price recorded was only four months ago. When driving by the stations today, remember that in June the average price in North Delaware was $4.065.
Unlike when the price of gas was going up every day, we don’t see people topping off their tanks every day now. It is easy enough to see why. The price of gas is very likely to be lower tomorrow.
The two main reasons the price of gas went through the roof were loose monetary policy (the weak dollar) and demand outstripping supply. Since the economic troubles have begun, the price of commodities – including oil – has come down significantly. Add to that the reduced demand of a contracting economy and the result is prices that are half what they were earlier in the year.
The only bad part of this is people backing off from buying higher fuel mileage cars. Lack of demand may tempt the car manufacturers to put off designing and building more small cars. But demand – here and in the emerging markets of Asia – will come back and the inflation that is a certain result of our weak dollar policies will raise the price again.
If you have a choice about structuring your supply chain, it will pay in the long run to minimize fuel usage. Besides, lowering fuel usage could add to your GREEN credentials.
I passed the Speedy Gas Station on Kirkwood Highway today and saw they had gas priced at only $1.97 a gallon!