Gas prices are down in the Roaring Fork Valley, but for how long?
The gas spike is over, and prices are starting to stabilize.
Gas tends to be regionalized based on supply, demand and competition, said Skyler McKinley, public affairs and regional director for AAA, which tracks gasoline prices across the United States.
“So when you look at Denver, for example, there’s a lot of travelers going to and through Denver,” McKinley said. “There’s also a lot of service stations. So there’s a lot of competition. And there’s a lot of incoming supply. That’s why Denver has relatively cheap gas prices.”
Going further out and heading up I-70 through Summit County, Eagle County and Garfield County, prices get higher because of tourism and less gas stations competing to bring prices back down.
“You tend to see more expensive prices, because those are tourist corridors with relatively fewer service stations competing for tourists who might not know the next place they can get gas,” he said.
Higher prices in less populated areas like Dolores County, Montezuma County, Archuleta County, Conejos County and Costilla County is usually a function of a delivery lag, he said. There are fewer stations and travelers, and it is less likely they have sold all of the gas they bought during the hike.
“They bought gas when it was much more expensive, and now they’re selling it just to try to recoup their investment before they buy cheaper gas,” he said. “It’s because they’re not getting a delivery every couple of days. There’s just not as many drivers, so it takes longer for them to go through the tanks.”
Prices on gas get higher when closer to I-70 because it is along a major corridor, but gas in town might be cheaper than Denver because of the low profit margin on gasoline.
“The margin on gasoline is relatively low, so you might advertise for $3.80 to generate a lot of buzz so that people stop and they buy a candy bar or Coca Cola, ” McKinley said. “That tends to be where you make your money on gas.”
Prices are stabilizing but will probably not have any more drastic drops like the last month. He said that it will probably be penny amounts from here.
“In Glenwood proper, prices have fallen around 70 cents from where they were this time in a month. I would not anticipate another monthly drop off at 70 cents,” he said. “I think things are starting to stabilize depending on, of course, what goes on with the global economy.”
The possibility of a recession will just mean prices will continue to drop. Mckinley said that the spike caused people to travel less, which then helped prices drop. An additional recession would cause people to drive even less to save money.
“If people keep throwing around the talk of a recession and if that’s true, that will create jitters that will keep prices going further south, but my sense is prices are starting to stabilize,” he said.
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