Gas prices may stay low for 2015

By Steve Guntli

A new report indicates that the low gas prices Americans have been enjoying lately may last through 2015.

The study, conducted by petroleum analysts Patrick DeHaan and Gregg Laskoski at GasBuddy.com, forecasted a national average gas price of $2.64 per gallon in 2015. This represents a $97 billion drop in fuel costs nationally, compared to 2014.

Whatcom County has already seen dramatic price reductions, with prices below $2 a gallon at several stations. The average price in Blaine is $2.10 per gallon, less than the current Washington average of $2.22.

The lower prices could also drive international travel. Alison Mac, a petroleum analyst who contributed to the study, said the price of gas directly influences the cross-border travel trends of Canadians.

“Many Vancouver drivers do travel across the border to fill up on gas, because gas prices are about $1.35 cheaper in the states,” she said.

In 2013, 15 percent of Canadians coming into Whatcom County cited gasoline as the main reason for their trip, according to a study by Western Washington University’s Border Policy Research Institute.

Mac said gas prices remain significantly higher in Canada due to taxes, which don’t change with the price of gas. The average price of fuel in Vancouver is currently around $4 U.S. a gallon, of which $1.86 is taxes. Vancouver has the second highest gas taxes in Canada behind Montreal. Even with the recent drop in the value of the Canadian dollar, the low gas prices should prove to be an economic driver.

The GasBuddy forecast estimates that 2015 gas prices will only exceed $3 a gallon in the month of May. This is because most refineries in the U.S. close in May for maintenance and to shift production from diesel to gasoline, resulting in spikes of between 35 and 75 cents per gallon.

“It’s going to be difficult for Americans to face another spring-time spike in gasoline prices,” Laskoski said. “But hopefully it will be much more palatable, especially if we see pump prices start with a $2 instead of a $3 for most of the time.”

The price drop is partially driven by increased production in the U.S. Crude oil production in North Dakota’s Bakken region and the Permian Basin in Texas has been booming.

Washington and other west coast states have slightly higher than average prices, due to the cost required to transport oil from Alaska and the Midwest to the coast.

DeHaan and Laskoski did indicate that legislative changes could affect the forecast. Several states are expected to impose new gas taxes in 2015. The federal government could also consider raising the federal gas tax for the first time since 1993. U.S. gas tax is a per-gallon tax that does not vary according to the cost of the gas.

To read the full study, visit bit.ly/1E5C5C3.