Concerns over demand have caused oil and gasoline futures prices to plummet, with Florida gas prices already down by 3 cents and set to drop even lower.
The price decrease will continue unless futures prices recover from the recent sharp declines, with Florida gas prices now averaging $2.98 per gallon. It is not looking good though as wholesale gasoline prices are currently at their lowest point since April, when they were at $2.80 per gallon.
Lower Gas Prices May Be Linked to Higher COVID Cases
While this is bad news for the gasoline providers, it will come as some relief to smaller businesses reliant on company-owned vehicles, especially fleets. The lower prices means that drivers can fill the tanks of their company vehicles for less expense and help business owners conduct their operations with a lighter financial burden.
To ease the burden even more, fuel conservation advice for business owners includes combining errands to limit driving time and removing excess weight from each vehicle. It can also be worth paying for gas in cash as some gas stations charge a little more when the gas is being paid for by credit card.
Covid Continues to Impact Fuel Prices
The gas price data has been provided by AAA, The Auto Club Group. They publish fuel price averages every day on the AAA website by surveying data from up to 130,000 gas stations based on credit card swipes. They also aim for statistical reliability by comparing the data with direct feeds from the Oil Price Information Service (OPIS) and payment processing provider Wright Express.
The AAA’s spokesperson, Mark Jenkins, discussed the impact of the ongoing pandemic on fuel prices. He said: “The delta strain of Covid-19 continues to drive fuel prices. The busy summer driving season ends in September and market watchers are worried that Covid-19 will cause demand to drop more dramatically than it has in previous years.
“If crude oil and gasoline futures hold at current levels, prices at the pump could drop more than 20 cents per gallon in the weeks to come.”
U.S. Crude Oil Price Drops
The price of U.S. crude oil decreased by almost 10% towards the end of August. This dropped the price per barrel to $6 less than the middle of August. At the same time, gasoline futures dropped 12%, which works out at about 24 cents per gallon.
As Florida gas prices began averaging $2.98 per gallon, it was the first time since the beginning of August that the average price had dropped below the $3 per gallon mark. However, gas prices are still up on where they were a year ago, with current average prices still 90 cents more than this time last year, and 59 cents more than during the same month in 2019.