Prices at the pump have been falling consistently for the past several weeks nationwide, and Gainesville has been no exception.
The average gas price in the country is $2.95, down 32 cents compared to last month. For Georgia, the average is $2.85, which is down 43 cents a gallon from last month, according to Gregg Laskoski, senior petroleum analyst, Southeast, for Gasbuddy.
“What you’re seeing in Georgia is indicative of what’s going on in the rest of the country,” he said. “We expected to see prices decline at this time of year, but I don’t think anybody could have expected to see the rate of decline that we’ve seen just in the last month,” he added.
Laskoski said a slight price decrease is normal this type of year due to switching from summer blend gasoline to winter blend, and lower consumer demand in the winter months. However, this more significant decline is attributed to the falling prices of crude oil.
“The crude oil prices have declined to the lowest we’ve seen in four years. The main reason is because we’ve had extraordinarily high production,” Laskoski said. “U.S. fuel production reached the highest level we’ve seen since 1986. And production is very strong from all over the world, so production has outpaced demand, and that’s why gasoline prices are falling,” he said.
Laskoski said he believes prices could continue to decrease and possibly be even lower by Thanksgiving Day, and even lower through Christmas.
“There’s no way to predict with absolute certainty how long this will last, but as long as crude oil prices continue to decline, American consumers can expect their gasoline prices at the pump to continue to be pretty low,” he said.
As of Thursday evening, the lowest prices in the area were at Kroger and QuikTrip, both at Jesse Jewell and Limestone parkways in Gainesville, at $2.64 a gallon.
While Kroger did not have anyone available for comment, Mike Thornbrugh, manager of public and government affairs for QuikTrip corporate offices, also attributed its lower pump costs to the falling crude oil prices.
“It has dropped significantly the last 60 days. And crude oil quite frankly makes up about 65-70 percent of the total cost of gasoline,” he said.
Thornbrugh echoed Laskoski’s comments on supply, as well.
“There’s a tremendous supply of product that’s been available, so you have more than ample gasoline out there, which helps drive the cost down,” he said.
As for competition with other gas stations, Thornbrugh said while QuikTrips are certainly aware and observant of surrounding stores, “that doesn’t drive us. We are cognizant of what’s going on around us, but we look at our decision, our belief and our ability to buy the product and understand what’s going to happen, in our opinion, seven, 10, 30 days down the road,” he said. “However, are we going to let somebody across the street or down the street beat us? No, we’re not.”
As for the dropping prices throughout the country, Thornbrugh said he believes “there’s room for them to decline. There will come a point where it’s going to quit dropping, but it’s a huge downward movement lately.”
One local station affected by the competition of the new Kroger and QuikTrip gas marts is the Texaco Food Mart on Park Hill Drive in Gainesville. Shamsuddin and Shabnam Jindani, a married couple who have owned the store for a little over three years, have seen a decrease in business over the past few months.
“We are a small store, a small business, and it’s hard to compete,” Shamsuddin Jindani said.
The Jindanis said they have lowered prices for their gas as much as they can to keep up with current price trends, but with the Texaco stores carrying Techron gasoline blends, there’s not much room for additional lowering without losing significant income.
“Our gas gives you more mileage, a clean engine. We want our store to survive,” said Shamsuddin Jindani.
Because many area residents are flocking to the cheaper prices, the Jindanis have also lost business in their market.
“It’s the customer’s right to get the cheapest gas,” Shabnam Jindani said. “But we also lose business inside, because people, of course, don’t want to go out of their way to get gas one place and get groceries here,” she said. “Low gas prices are good for everyone, but the competition is hard when some stations fall so low that people go out of their way to shop there. People want good gas for their cars, but when prices are so low, they go to the lowest gas,” she added. “We try very hard to keep our store clean and welcoming, try our best to satisfy every customer and give them good service.”