C. Oregon Gas Prices Finally Drop — A Bit

The national average for regular unleaded gas has dropped another seven cents this week, to $3.57. But here in Oregon? It’s still well above that national average at $4.23, and that’s actually down from last week.

A fire back in February at the BP Cherry Point refinery in Washington caused gas supplies to tighten here in the Northwest.

And since then, we have been feeling it in the wallet.

“While Cherry Point might have been the one driving all the headlines … all these other (West Coast refineries) had lingering problems as well,” said Denton Cinquegrana, executive editor of the U.S. Refined Products of Oil Price Information Service.

Today, the refinery has come back online, and Oregon is starting to see a downward trend in gas prices.

“I do think the worst is behind you guys,” Cinquegrana said.

Which is good news for those who drive.

But you may be asking, where does your money go when you pay for gas?

For every gallon of gas about half goes to the price of oil. The other half goes to refineries, transportation to markets, retailers and to gas taxes.

“It does add up and each little hand in the cookie jar takes their little portion so to speak,” Cinquegrana said.

Oregon was the first state to implement gas tax in 1919, and we pay nearly 50 cents per gallon now.

ODOT relies on the gas tax because all of its projects are supported by it.

“So that gas tax increase was dedicated to projects across Oregon,” ODOT Region 4 spokesman Peter Murphy said Tuesday. “Central Oregon happened to get the Murphy Road project, and there’s others around the state.”

ODOT has been watching the prices and also has seen a drop in the number of people using our highways.

“The fewer miles people drive, because they have higher-mileage cars or because gas costs more, means there’s less fuel being purchased,” Murphy said. “So that means there’s less gas tax, which means your highway out there has less money for it.”

And while you maybe thinking about getting a fuel-efficient car, Murphy says there’s a downside, for road projects:

“The highway suffers the same use, but because you are spending less money, less gas tax comes in to support the same distance that we are traveling,” Murphy said.

There’s even been talk of extending the mileage-based tax truckers pay to cars as well, due to the drop in gas tax revenues.

But for now, there’s finally some positive signs at the gas pump.

“The market has started to fall back,” Cinquegrana said. “I do think retail prices are going to be coming down pretty soon.”

So just how soon and how fast will gas prices fall? Some are predicting within the next couple of weeks, it could be back down close to $4.

(While we were reporting live from a Bend Union 76 station Tuesday evening, the crew came out to change the sign and drop the price of regular gas a penny, to $4.23 a gallon.)

Here’s AAA-Oregon’s Tuesday weekly gas price update:

West Coast Consumers Finally Get Relief as Supply Issues Ease

Wholesale gasoline prices have dropped significantly on the West Coast over the past week and those lower prices will soon make their way to consumers here. The national average for regular unleaded has already fallen for 49 of the past 50 days, and drops another seven cents for the week to $3.57. Oregon?s statewide average drops two-and-a-half cents this week to $4.23.

Gas prices west of the Rockies shot up because of ongoing refinery issues, including the three-month closure of the Cherry Point Refinery in Washington state after a fire in February. Cherry Point is back on line, which is putting downward pressure on prices. And crude oil prices are close to eight-month lows, which are also sending wholesale gasoline prices sharply lower.

While the national average has declined steadily for the nearly two months since the 2012 to-date peak price of $3.94 on April 6, supply issues west of the Rocky Mountains have kept upward pressure on prices in that region.

In the last month, retail gas prices in ten states and the District of Columbia have fallen more than 30 cents per gallon, while prices in many western states have increased during the same period: Montana (1 cent), Idaho (3 cents), Utah (5 cents), Alaska (14 cents), Washington (18 cents) and Oregon (21 cents).

But the national average declined nearly five percent for the month of May, the largest drop since November 2011. Oregon?s average peaked for the year so far on June 1 at $4.27 a gallon, just shy of the record high of $4.29 set on July 3, 2008.

Crude oil is trading around $84 per barrel, compared to $91 a week ago. For the month, crude prices are down about 14 percent. Global economic concerns, easing geopolitical tensions with Iran, and a stronger U.S. dollar have combined to pressure prices sharply lower.