Published: Aug. 18, 2018
Gas prices remain stable in Wisconsin
By Nicholas Dettmann
ndettmann@conleynet.com 262-306-5043
WEST BEND — It’s been more than six years
since Wisconsin consumers saw gas prices for regular unleaded higher than $4
per gallon.
Nick Jarmusz, director of public affairs for
AAA — The Auto Club Group representing Wisconsin, Minnesota, Iowa and North
Dakota, said the highest average price for a gallon of regular unleaded
gasoline on record in Wisconsin was $4.20 in March 2012.
As of Tuesday, it is $2.80 in the
Milwaukee/Waukesha metro area, which is 50 cents higher than this point in
2017. The state average is $2.81. The national average, according to AAA, is
$2.85.
“Most people appreciate when gas is lower,”
Jarmusz said. “It increases disposable income.”
According to www.wisconsingasprices.com,
which tracks the state’s historical trends of gas prices as far back as 2007,
gas prices have
hovered between $2 and $2.90 per gallon since
the summer of 2016.
One reason for that is the stepped up domestic
production.
“There are 101 more active oil rigs (built) in
the last year, to bring the total to 870 active oil rigs producing
domestically,” Jarmusz said.
Kundan Kishor, economics professor at the
University of Wisconsin-Milwaukee, said, “U.S. is no longer a huge importer of
oil. Import is almost equal to export.”
According to wisconsingasprices.com,
gas prices in Wisconsin hit $4 for the first time in the middle of 2008. By the
end of 2008, prices plummeted to less than $1.76 per gallon. From there, prices
steadily increased until reaching $4 by the middle of 2011. Then, in March
2012, Wisconsin reached the peak in gas price on record.
When gas hit that $4 number, Jarmusz said,
based on AAA’s research, that caught consumers’ attention.
“People made adjustments; more on their day-to-day
plans; utilizing more fuel-efficient vehicles,” he said.
When gas was at or near $4 per gallon, Jarmusz
said travelers figured that more into their planning, such as vacations were
shorter either in duration or distance. Other adjustments consumers made were
to cut back on the type of hotel they stayed at or took advantage of free food
offerings such as a continental breakfast.
“When it comes to leisure travel, they still
found a way to fit that into their budget,” Jarmusz said.
He added, “Even on a long-distance trip, the
price per gallon will add up. But even at the most extreme, it’s a couple extra
$100, which is about the stay of a hotel room.”
What AAA found was the biggest impact on
consumers’ willingness to travel wasn’t correlated with gas prices, but rather
consumer confidence in the economy and job market.
Gas hovered at or above $3 per gallon until
November 2014. By January 2015, gas was at $1.95 per gallon. In the following
month, gas was at its lowest point since 2008 at $1.50 per gallon.
Since then, prices have gone up, but at a
comfortable rate. Gas has stayed above $2 per gallon since the middle of 2016
and hasn’t gotten to $3 per gallon.
“If it stays below $3, I’m fine with it,” said
West Bend’s Jesus Cruz.
Technological advancements have played several
roles in the gas prices.
“As with any product, price is determined by
supply and demand,” Kishor said. “The demand drove the prices up.”
Kishor added that demand is not what it used to
be.
One factor behind that is more cars are being
built to be more fuel-efficient. Two, the technology at producing gas has
changed, such as being able to do it quicker and more efficiently. Not to
mention, electronic cars are working their way into the market.
“It is still a relatively small share of market
in electric cars versus traditional vehicles,” Jarmusz said. “I don’t know if
it has had an impact on the prices.”
A cut in production could drive the cost for
gas back up if the electric car market booms.
Jackson’s Josh Staller said he
has a more fuel efficient vehicle, which helps
save at the pump.
“They’ve played an important part in
stabilizing it,” Kishor said about the technological advancements in oil and
fuel prices.
Still, as gas prices in West Bend hover close
to $2.90 per gallon, local consumers are irritated by that because trips into
Slinger and Hartford are $2.79 per gallon or Germantown prices are as low as
$2.69 per gallon.
“I hate the gas prices in West Bend,” Cruz
said.
When gas was $4 or more per gallon, Cruz
commuted an hourand- a-half each day, spending $40 per day on gas.
“That sucked,” he said.
South Carolina pays the cheapest per gallon at
$2.52, while Hawaii pays the most — $3.71.
Over the last several months, there has been
consistent debate about road repairs in the state. Gov. Scott Walker has made
it clear he doesn’t want to raise the gas tax to help fund those repairs,
unless a cut is made elsewhere.
With Walker up for re-election, the opportunity
is there to change the gas tax.
Cruz said he’s not worried about a gas tax
increase, if it happens. He believes the prices would go up only a few cents
per gallon.
As for the gas tax, Wisconsin is right at the
national average of 31.04 center per gallon — 30.9 cents. Alaska pays the
cheapest at 12.25 cents per gallon, while Pennsylvania pays the most — 58.2
cents.
Wisconsin’s gas tax has been at 30.9 since 2006
when the Legislature eliminated the annual indexing adjustment.
“I’m very reluctant to raise,” said Timothy
Ramthun, newly elected representative of the 59th Assembly District. “But
something has to give.” He added the longer the wait on how to fix roads, the
more costly it may become.
“Time is an enemy,” he said.
Tony Evers, Democratic nominee for governor,
said in a provided statement, “For eight long years, Scott Walker has allowed
Wisconsin’s roads to literally crumble beneath us while he crisscrossed the
country chasing his political ambition. Because the roads are littered with
potholes, the average Wisconsin driver is forced to shell out $640 a year for
car repairs. Local governments have been
forced to enact wheel taxes in order to make up
for a lack of state investment. Voters have had enough. Walker has refused to
work e ven with his own party and he’s sabotaged every bipartisan proposal
that’s been floated. I will work with legislators from both sides of the aisle
and do whatever it takes to find the solution.”
Also, Kishor said there shouldn’t be concern
about any possible tariff battle over foreign oil under President Donald Trump.
“My guess is oil is less sensitive to tariffs
and the tariff war,” Kishor said.
When asked how likely it is for gas to return
to $4 per gallon in Wisconsin, Jarmusz said a lot of factors need to be
considered.
“The trend lines are influenced by basic supply
and demand,” he said. “Either production would have to significantly fall off
(domestically or international); it could be caused by a shift in policy,
instability in oil production.
“If we saw demand spike, that would also lead
to greater pressure. We’d have to see some pretty significant changes to see
change.”
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