Gas prices in Arkansas fall below an average of $3 a gallon

Sam Khaveer fills up his car at the Murphy Express gas station on West Pershing Boulevard in North Little Rock on Monday, Nov. 21, 2022. (Arkansas Democrat-Gazette/Colin Murphey)
Sam Khaveer fills up his car at the Murphy Express gas station on West Pershing Boulevard in North Little Rock on Monday, Nov. 21, 2022. (Arkansas Democrat-Gazette/Colin Murphey)

Edwin Johnson thought he misheard the question Thursday.

It had to be clarified that he was being asked about gas prices going down, not up.

"Oh, I don't even notice," Johnson said.

In fact, the average price for a gallon of regular gasoline in the state of Arkansas is under $3, according to AAA.

Standing near his 2004 Mercedes E500, Johnson took a few steps and lowered his sunglasses to look at the digital sign of the Exxon gas station on Cantrell Road.

In bright red, he saw a price of $2.89.

"That's cool, man," said a taken aback Johnson, who'd been paying up to $80 to fill up his car up once a week for months. "Surprised for sure. But I'm happy to see it."

On Thursday, the statewide gas price average in Arkansas was $2.98 for a gallon of regular unleaded fuel, according to the AAA Arkansas Weekend Gas Watch. That's 10 cents cheaper than one week ago and it's 4 cents cheaper than the price on Dec. 1, 2021.

Meanwhile, the national average price for a gallon of regular unleaded is $3.47, down 12 cents from last week and 9 cents more than the price per gallon a year ago.

Johnson could be forgiven for being caught off guard with the sub $3 prices.

Combined with the Russian invasion of Ukraine in February, the cutting of gas production by OPEC and inflation, gas prices in Arkansas and across the country have been well above $3 for most of the year.

As evidenced by his reaction, Johnson said it "got to a point" where he stopped paying attention to the price.

"Because everything has been so high," Johnson said. "You just adapt and just get used to it."

Rebecca Irons, another customer at the Cantrell Road Exxon, said she feels "great" about the lowered prices.

"I'm glad because I'm traveling a lot these days," as she moves her mother into assisted lived and sells her home, she said.

Irons said this as she filled up her Subaru Crosstrek.

"This is actually a really cool economy car," Irons said. "It's been about three weeks since I've had to fill up. I don't usually drive very much. But I've had to drive some distances, so it's really nice not to have to fill up every week."

The recent draw-down in gas prices can be attributed "largely" to the stabilization of crude oil prices, said Nick Chabarria, a spokesman for AAA Arkansas.

Chabarria said the price of crude oil accounts for about 50 to 60% of the price that customers pay at the pump. In 2021 the rest of the cost, according to the U.S. Energy Information Administration, was divided between refining costs (14.4%), distribution and marketing (15.6%) and federal and state taxes (16.4%).

"We've seen crude oil really level off around the $80 market and below for the last few weeks now," Chabarria said.

Arkansas drivers are experiencing the lowest statewide gas price average since January, according to AAA. At $2.98 a gallon, Arkansas has the third lowest price behind Texas ($2.84 a gallon) and Oklahoma ($2.96).

Chabarria said Arkansas is usually within the top 10 lowest averages in the country.

This can be attributed to Arkansas' low fuel tax rate for gasoline ($0.246 per gallon), but most importantly, location, location, location.

"So kind of being centered in the middle of the country, really not far from the Gulf Coast refineries, also near Cushing, Okla., refinery centers, which is a large Midwest hub for refining, that really provides Arkansans relatively lower fuel costs compared to other states," Chabarria said.

It's entirely possible this reprieve at pump could be short lived.

OPEC+ is scheduled to meet this weekend, and the group could decide to cut crude oil production in hopes of tightening supply and raising prices.

Also helping keep prices low at the moment are some key United States oil refineries, which returned to churning out gasoline after months of being out of commission for maintenance and repairs.

But just as big a factor is the current turmoil in China. As its leaders signal new covid lockdowns are imminent, touching off protests throughout the country, the expected economic fallout has turned oil traders bearish.

China alone accounted for 16% of global oil demand last year, according to the research firm Capital Economics, which projects its purchase of oil will drop by 1 million barrels per day in December as covid infections spread. The effect of such a drop on global oil markets is considerable, reducing the price of Brent crude by as much as $10 a barrel, or more than 10%.

Information in this report was provided by Evan Halper of The Washington Post.


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