About those low gas prices

208
Advertisement

Hey, it’s  Friday,

It may not last, but Delaware has the lowest gas prices in the nation.

 AAA Mid-Atlantic reported the ranking earlier this week. As of Friday morning, the state was still edging out South Carolina and Mississippi,  with a price below $2.55 a gallon for regular, with many stations charging $2.50

By the way, the above figure is an average price and may not reflect stations and stores having a promotion or small-scale gas war.

The reasons for the ranking remain something of a mystery.  A likely reason is supply and demand. We do know that crude oil supplies are ample. Saudi Arabia plans to up its oil production in the wake of the debacle over the killing of a dissident who wrote for the Washington Post. 

Advertisement

Longer-term trends such as higher gas mileage figures from newer cars and trucks are taking hold. While their numbers are tiny, electric cars  will also play a role in reducing gas tax revenues.

Meanwhile, Delaware gas tax revenues are getting a modest boost from sharply higher prices in New Jersey as drivers fill up before heading home.

Up until recently, South Jersey gas prices rivaled Delaware figures, even though its gas tax was far higher.  But another recent gas tax increase in the Garden State sent prices skyward for some reason.

Social media comments on the low prices came with a hint of cynicism with a couple of readers seeing a  gas tax increase in the offing.

They may be right. Construction bids are coming in above estimates, a reflection of a labor shortage in the industry that is contributing to few bidders on some projects. (See story below). 

Delaware missed an opportunity by indexing – charging more when the price at the pump is low and backing off when prices spike. 

On the plus side, Delaware is part of a small test on a mileage-based system for transportation funding that might supplement or replace the gas tax.

As you might remember,  the  news proved to be as welcome as a skunk at a picnic.

Innovation isn’t always our strong suit when it comes to paying for roads and bridges. But at least we have cheap gas.

Enjoy your weekend. This column and newsletter returns on Monday. – Doug Rainey, publisher

Advertisement
Advertisement