In Park Hills, Missouri, gas prices have fallen to $1.96, but the big news is diesel prices are at $2.23 a gallon. For once I feel like I got a decent explanation on what’s going on and what we can expect.
Michael Burdette, a senior analyst with the energy information administration, said he doesn’t foresee gas prices to continue the rapid downward plunge in the Midwest.
“The change in prices is going to slow down in the Midwest,” Burdette said. “Prices have fallen the fastest in the Midwest and are way out of proportion compared to the rest of the U.S. The average price of gasoline in the U.S. is $2.37 right now. You guys are already under $2 a gallon.”
Burdette said the spot price for conventional gasoline in Missouri was $1.53 per gallon as of Tuesday.
“Now you have to add 18 cents for federal tax and 17 cents for Missouri state tax to that figure,” Burdette said. “The price goes up to $1.88 per gallon. Right now you guys are at the point where the retailers are at about the break even point. That is why I think prices will slow down in the Midwest.”
Burdette said he thinks prices will stabilize in the Midwest and will continue to fall in other regions of the country.
“The prices in other regions will fall more rapidly to catch up with the Midwest,” Burdette said.
While experts originally forecasted diesel prices would stay closer to $3 a gallon, Burdette said those prices should continue to fall also.
“Diesel prices were hung up earlier because the refineries were struggling making a new type of diesel that has less sulfur in it,” Burdette said. “In 2007 all new trucks will be required to run this new type of fuel. The old trucks will also be able to run on it. The difference is the new trucks will only be able to run on this type of fuel.”
Burdette said the spot price for diesel in Missouri is $1.77 per gallon.
“Federal taxes are higher on diesel than they are on regular gasoline,” Burdette said. “Federal taxes are 24.4 cents and state taxes are 17 cents per gallon. With the taxes figured in the price is $2.18 per gallon. Prices of diesel fuel should continue to fall somewhat.”
Burdette said the diesel fuel currently used was introduced in 1993.
“It is called a low sulfur diesel and contains a maximum of 500 parts per million of sulfur in it,” Burdette said. “The new diesel is called ultra low sulfur. It has a maximum of 15 parts per million of sulfur in it.”
Most of the stuff most of us probably already know the basics of, but I like how he breaks everything down with some specifics.
Source: mydjconnection.com