The average price for a gallon of regular unleaded gas in Oklahoma reached a record amount of $3.98per gallon Wednesday, a price not seen here since AAA began tracking average fuel prices on national and state levels in 2000.
Nationally, the average cost for the same product also set a record, at $4.40 a gallon.
And while the average 2022 cost (adjusted for inflation through April) of the product distributed from Gulf Coast refineries is about $3.38 a gallon, both work and school commuters and gig economy driversare feeling the pinch.
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Oklahoma drivers respond to rising gas prices
John Doyle, an Oklahoma City manwho spends six days a week delivering meals across town that are ordered by people through several popular mobile apps, said increasing fuel costs are causing him to be more selective about what delivery offers to take.
Today, he passes onoffers that involve longer trips and lower payouts made to him through DoorDash, Uber Eats and OLE, infavor of others that offer him more income and less expense.
"I am paid by these people very inexpensively (anywhere from $2 to $5per trip, plus mileage reimbursem*nts for trips with longerdistances that range from about 40 to 50 cents a mile), plus tips."
Doyle, who until the COVID-19 pandemic worked at Nebu, a restaurant in the Devon Energy Center, said he spends six days a weekworking lunch and dinner rushes by locating himself near clusters of restaurants that are popular with those apps' clients.
Orders that involve nearby eating establishments, especially onesthat includea large numberof items, are what he likes bestbecause they often include great tips, he said.
"But that doesn't happenoften."
He also avoids taking orders where no tip was offered, as well as others that would send him into traffic gridlock situations.
"If I am out on the road getting from one place to another and it takes too long, it affects my ability to make money."
Others who drive as part of their jobs don't necessarily have an option to pick and choose when and when not to go, like Yukon-based insurance salesman Byron Hau.
Hau, who was filling his 2016 pickup with gasoline at an OnCue on Wednesday, said much of his job with the Oklahoma Farm Bureau involves in-person visits to home and business owners to sell products offered by his company. At $4, $5 or more, staying put just isn't an option for him, he said.
"I eliminate whatever unnecessary driving that I can,but I have a job to do, as well."
Still, he said he would never change careers no matter how expensive fuel becomes, observing that the Oklahoma Farm Bureau is a great company to work for.
Thenthere are others who must routinely hit the road to get from where they live to where they go to school, like Tahj Davidson, a scholar athlete who lives in south Edmond and commutes to Langston University about 40 minutesaway.
Davidson, a Dallas native, said he makes that trip four times a week for classes, and sometimes commutes more often than that when required by football practices, games and other activities.
"It is a pretty hefty drive, and it is tough a little bit now, with gas prices like they are," Davidson said. "There's not too much I can do about it.I have just kind of have to eat it, a little bit."
AAA tracks gas prices, offers suggestions
AnAAA spokesperson said Wednesday that Oklahoma's average price for a gallon of regular unleaded has jumped 14 cents just in the past week. Wednesday's price of $3.98 for the product was $1.25 more than it was a year ago.
As prices remain high, the insurer/automobile services business recommends consumers consider taking the following steps to reduce added expenses, including:
• Keeping vehicles properly maintained and tires properly inflated (low tires are less safe, don't last as long and can decrease mileage by about 3%).
• Usingmanufacturers' recommended fuels. AAA estimates Americans waste more than $2.1 billion annually by purchasing higher-octane fuels than what they need.
• Avoiding idling, which gets you zero miles per gallon.
• Observing postedspeed limits, as gas mileage decreases rapidly at speeds above 60 mph (each 5 mph you drive over 60 mph is equivalent to paying an additional 15 cents per gallon of gas).
• Consolidating trips.Combining errands into one trip saves time and money, AAA says.
AAA also offers motorists several resources that could help, including itsFuel Price Finder, whichlocates lowest fuel prices in a givenarea and its Gas Cost Calculatorand TripTik Mobileapps that help driversbudget travel expenses.
“It now costs drivers in the U.S. about $23 more to fill up their gas tank than a year ago,” said Leslie Gamble, spokesperson for AAA Oklahoma.
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Why are gas prices rising?
The cost for raw crude makes up over half of the cost motorists pay for gasoline.
But Garrett Golding and Lutz Kilian, economists at the Federal Reserve Bank of Dallas, published a paper on the bank's website this week that notes oil's cost isn't the only factor influencinggasolineprices.
Independent oil and gas companies — those without refining assets — are responsible for 83% of U.S. oil production and about half of the oil consumed in the U.S. Throughout the recovery following COVID-19 shutdowns, those operators have faced increasing product and labor shortages that have made it more difficult for them to respond to today's global commodity prices. Plus, only 1% of U.S. fuel retailers are owned by companies that also produce oil, they wrote.
Produced oil, they stated, is sold in competitive markets at prices reflecting global supply and demand metrics.
Marketed oil, meanwhile, is purchased by domestic refiners who break that product down into gasolines, diesel and other fuels that then are sold to more than 400 distribution facilities that set their prices in regional competitive markets.
From there, distributors sell fuels to retailers and other end users at another price that reflects local conditions.
Retailers, they wrote, set prices for what they are selling today based upon local, state and federal taxing rates, what they expect it will cost them to acquire tomorrow's supplies, plus a markup that covers their operating expenses.
"Before a gallon of gas getspumped into a car’s tank, it has traveled through a complex supply chain. Oil companies play an extremely limited role in how retail gasoline prices are set," they wrote.
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Why aregas prices staying high?
Up like a rocket, down like a feather.
That's how many economists describe how fuel retailers react when their costs climb, and this latest shock tied to spiraling global oil prices after Russia invaded Ukraine provides a good example, the two wrote.
Golding, a senior business economist at the bank and Kilian, a senior economic policy advisor in the bank's research department, wrote that could be happening forvariousreasons.
They speculated that slow-to-react station operators could be keeping prices elevated to recapturelost margins during initial costs upswings andthat others may beconcerned rapid price swings could eatinto their profit margins, among others.
When will gas prices go down?
Bill Farren-Price, director of Enverus Intelligence Research, expects that a predicted future growth in domestically produced oil eventually will help ease current market conditions, even in the challenging environment producers currently face.
Farren-Price also credits President Joe Biden's decision to release crude reserves from the nation's stockpile, saying they have kept a bad situation from getting a lot worse.
“Had it not been for Joe Biden’s Band-Aid of withdrawals from the Strategic Petroleum Reserve,Russian supply outages and rising demand would have kept balances tight and stocks drawing through the remainder of the year," Farren-Price said.
Oklahoma City's Doyle, meanwhile, said he's keeping a close eye on where fuel prices are headed.
"I've got a Sam's membership that helps a little bit, but even it is starting to go up. When it hits $4, it will have me looking at Indeed. At $4.50, I might be walking some places just looking for a steady paycheck to supplement what I'm doing through my delivery business. If it gets to $5? I'll probably park it until I can find something better," he said.
Business Writer Jack Money covers Oklahoma’s energy and agricultural beats for the newspaper and Oklahoman.com. Contact him at jmoney@oklahoman.com. Please support his workand that of other Oklahomanjournalists by subscribing to The Oklahoman.
