It’s going to be a good year for motorists. Sort of.
According to GasBuddy.com predictions, 2019 will feature a yearly national average of $2.70 per gallon, representing a 3 cent drop versus 2018. However, the gas price tracking company also warned the national average could surge to over $3 per gallon as soon as May.
Ottawa’s pumps have lately followed the national trend of low holiday season prices, to the delight of many consumers.
“It’s a little more money to do something else,” said Bud Trickle, Ottawa resident. “I think it’s a good thing. I think competition in general is a good thing — I love to see the gas companies have to compete. The less you have to pay, the better it feels.”
While the prices might be a boon for consumers, locally-owned gas stations are taken a hit, according to Ottawa Mini Mart owner Irshad Cheema.
“It’s been a struggle,” the local businessman said. “We’re selling below cost to try and ‘keep up with the Joneses.’ It’s great for the customer, obviously, but for the retailer — it’s up and down. It brings customers in, but at the same time, you can only sustain selling at a loss for so long before it really starts affecting you. We’ve been selling at $1.75, $1.80 for coming up on a month now; cost came in this morning at $1.89, for delivered fuel.”
This winter’s prices aren’t the lowest Ottawa Mini Mart has seen, but even past price lows have still contained a profit margin, he said.
“In 2016 we were down to $1.35 — that was the lowest we’ve seen, but at that time profits were still there,” he said. “You weren’t losing money.”
To compete, local stations must find extra ways to incentivize customers, Cheema said.
“We give people 3 cents off per gallon if they pay with cash,” he said. “We’re a non-corporate, family business, and that’s our incentive for people to shop hometown”
For better or worse, Cheema sees gas prices beginning to rise near the end of this week.
“Oil prices are going back up,” he explained. “I checked this morning, and the futures were pretty much at $50 per barrel.”
GasBuddy agree’s with Cheema’s outlook in the long term.
“The party at the pump will likely wrap up in the next month or two, and prices will begin to rally as OPEC production cuts and a strong U.S. economy push gas prices back up. While the national average failed to hit $3 last year, we have an even stronger possibility of seeing that ugly possibility, which would push prices in some places from $1.99 today to over $3 this spring- which would be an impressive and shocking turnaround in just a few months,” said Patrick DeHaan, head of petroleum analysis at GasBuddy. “One factor that may have motorists unexpectedly spending less is what happens in the White House. Should all the darkest realities come to fruition, it could lead to slow down in the economy and take gas prices right along with it. Buckle up for the extra volatility we’re going to see — it could be nauseating.”
(Italics) Editor’s Note: How accurate was GasBuddy’s 2018 Forecast? Assembled in late 2017, the forecast called for a yearly national average of $2.57 per gallon with a peak of $2.89 per gallon in April. 2018 ended with a yearly national average of $2.73 per gallon with a peak of $2.98 per gallon on May 24.