MICHIGAN - The average fuel price in Michigan has slipped below $1.50 per gallon, with one station north of Detroit currently pricing gas at $1.20 per gallon, according to gasbuddy.com.
Prices in the coming days could go even lower, with "99-cent gasoline becoming a strong possibility," says Patrick DeHaan, a senior petroleum analyst for the website that posts real-time pump prices submitted by motorists.
Gas prices in Michigan went as low as 47 cents per gallon last month. (photo by Bethany Bartlett via GasBuddy.com)
"Before (the) shift to summer gasoline begins, refiners must move winter-spec gasoline. To do it, they're dropping prices significantly as inventories of winter-spec gasoline swell," DeHaan said. "Once it's gone, look for a slingshot at the pump. But for now, (there's) more downward room to fall.
"It'd take a few days at least (to reach 99-cent gas), perhaps weekend at soonest, perhaps early next week. Once winter gasoline is gone (and the market spikes), that closes this chapter of ultra-low gas prices."
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Michigan is one of nine states seeing the lowest average gas price in 12 years, according to gasbuddy.com.
The region is "awash in crude oil and refined products and demand is not eating into supply," said Mark Griffin, president of the Michigan Petroleum Association and Michigan Association of Convenience Stores. "This oversupply coupled with low seasonal demand here and abroad has led to lower crude and gasoline prices."
But "right now we are at the traditional valley in the demand curve," and prices likely will rally as demand picks up, Griffin said.
"For cost to go down another 40 to 50 cents (to get under $1), I won't say it's impossible but I wouldn't bet on it either," he said. "I wouldn't be surprised to see someone do it just to get all the free advertising.
"Those who have their product on sale, selling well below cost, are either chasing volume and customer in-store traffic or are using predatory pricing in an attempt to drive their competition from the market. Those well above cost have either been reported to the online sites in error or have high-cost product in their tank that they are not willing to sell at such an extreme loss."
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