Tavarest Gray of Starkville pumps gas Tuesday night at the Shell Station on Blackjack Road. Gas prices are generally up since last year but are expected to stabilize. Photo by: Luisa Porter/Dispatch Staff
June 6, 2018 10:37:54 AM
If you are looking for a way to remain optimistic about gasoline prices, the best thing to note is that it could be worse, said Don Redman of AAA, which monitors gas prices.
While prices have increased steadily over the past year -- the Mississippi average for a gallon of gasoline is 54 cents more than it was in June 2017 -- Redman said the prices have stabilized and, barring some unforeseen developments, should not spike for the remainder of the year.
"Right now, we are seeing the price of crude oil dropping some, which will bring the price down," Redman said. "Right now, the state-wide average is $2.64, which is actually down a couple of cents from last week."
Redman said the increases seen over the past year have been slowed by a variety of factors. While OPEC has cut back on oil production, U.S. oil production has exceeded market expectations, Redman said.
"Russia and Saudi Arabia are starting to lose market share as a result, so there's a belief that they will loosen oil supply, which should bring the cost of crude oil down," he said.
Redman said that earlier projection of gas prices in Mississippi increasing to the $2.70 to $2.80 range are now lower.
"It may wind up being closer to what it is now, in the $2.60 to $2.65 range," he said. "Of course, we are coming into hurricane season and that could change everything as we saw last year."
The big jump in gasoline prices is having an effect on city budgets, which calculate fuel prices during their budget planning each July and August.
In Columbus, all city departments get their gas at the city's public works department. Public Works Director Casey Bush said staying within the fuel budget until the end of the fiscal year in September will be a challenge.
"It's a major difference between what we are paying for fuel and what we budgeted for," Bush said. "We budgeted our fuel based on what it cost last year, so it's going to be a challenge to stay within our budget until October.
"There's not much we can do," he added. "We have some equipment that we don't use on a daily basis that we may be able to reserve some fuel on, but most of the fuel is for essential use -- police, fire, the landfill. We can't do anything that affects those services in a major way."
Bush said the city budgeted $240,000 for fuel for the current year.
"You're looking at about a 25 percent increase in fuel since this time last year," Bush said. "That makes it tough on the budget."
In Starkville, the city budgeted $187,750 for fuel, most of which is used by the city's police department ($110,000).
"It's too early for us to have a real sense of the impact of price increases, but assuming a 20 percent increase for the full year, we're looking at about $37,500 in general fund increases," said Sandra Sistrunk, the city's budget committee chairman. "A 30 percent increase would be about $55,000, enough to fund a policeman and car."
SPD Chief Frank Nichols said there's little that can be done to save on fuel costs.
"Most of our costs are on patrolling," Nichols said. "That's not something we can cut back on. So, really, all we can do is try to cut back on other areas to make up for what the increase in our fuel costs will be. Hopefully, the prices won't keep going up and we won't be too far over budget."
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected]
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