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Gas Prices Continuing to Drop

BY MELANIE BUCK –

People are enjoying lower fuel prices across the nation but fuel consumers in Polk County are scratching their heads as to why local prices aren’t as low as the surrounding areas. Readers asked the Pulse to get to the bottom of why prices range 15 to 64 cents higher than cities such as Hot Springs, Little Rock, and Oklahoma City.

Fuel prices are based on a number of factors. The majority of the cost of fuel is determined by the price of crude oil. The U.S. Department of Energy breaks each dollar down and has an approximation of where each penny spent is distributed. For each dollar, 65 cents is for crude oil, 14 cents for refining costs, 13 cents for taxes, and 8 cents for distribution and marketing. When you do the math and figure that per gallon, the numbers are a bit more intimidating. In Arkansas, consumers pay 21.5 cents per gallon for state gasoline tax plus 18.4 cents per gallon for federal gasoline tax for a total of 39.9 cents tax per gallon. However, taxes are the only factor that doesn’t fluctuate daily.

Crude oil is the number one factor. This is determined by the world’s oil-exporting nations, particularly the Organization of the Petroleum Exporting Countries (OPEC). The amount of crude oil these nations produce, determines the price per barrel. In recent years, a major spike was seen. In 2004, a barrel would bring $35, when gas hit $2 per gallon for the first time in history. After the Gulf Coast was slammed by Hurricane Katrina the prices doubled. An all-time high was reached on July 11, 2008 when a barrel cost $147, costing consumers $4.11 per gallon on average. Today, a barrel of crude oil can be found for $65-$69, bringing the average per gallon to $2.75. All averages are national and at $2.63 per gallon, Mena is below that figure.

This brings us to the issue that seems to impact Mena’s prices more than other areas. Brian Kesterson, owner of Kess’ Korner in Mena, explained that Mena is so far from the main fuel ‘hubs’ that delivery costs to Polk County are higher than others. Fort Smith and Little Rock are both home to fuel distributors, causing their prices to be lower than our area. Oklahoma City, also home to distributors, is down to $1.99 per gallon. The lowest price in Arkansas as of December 7, was Turner Bend Store in Ozark, charging $2.05 per gallon. The highest in the state is, interestingly, $3.63 in Jacksonville, just on the outskirts of a major hub.

Major predictions are being made that will see gasoline prices fall below $2 per gallon, statewide, in 2015. Even with Polk County prices being higher than the neighbors, consumers have expressed that the falling prices couldn’t come at a better time. Small business owners and department stores alike hope that lowering gasoline prices will encourage shoppers to spend a little extra this holiday season.

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2 comments

  1. My argument to “being away from the hubs” would be then why is cove cheaper, as well as Waldron? Mena can’t be 30 cents per gallon more because of distance from hubs… I would be its more because were a small out of the way town where they know they can. Gas was a full 50 cents cheaper PER GALLON in fort smith than Mena as of Friday.

  2. I would also love to see our food and other prices dropping as the number one complaint from business owners is we must charge more as gas is costing more????? So now with gas dropping so drastically, where is the savings passed on? Or just bigger bonuses for business owners?

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