Gasoline prices coming down in Southern Nevada, may fall further

While Southern Nevada residents are thankful for falling gasoline prices as they drive during the Thanksgiving holiday, the sudden drop over the last month has left many puzzled why it's taken so long.

The average gasoline prices for regular unleaded recorded in Las Vegas on Wednesday stood at $2.59 a gallon, according to GasBuddy, a Web site that tracks gasoline prices around the country. That's 12 cents a gallon lower than last week's average and nearly 25 cents below last month's average, said Patrick DeHaan, a senior petroleum analyst with GasBuddy. A year ago the day before Thanksgiving, Las Vegas residents paid $2.98 a gallon, he said.

Lower demand in the fall months typically leads to a drop in gasoline prices, but DeHaan said the big difference this year is the price of oil that's dropped from $65 a gallon a year ago to $43 a gallon this week because U.S. and global oil production remains high. That's leading to the lowest pump prices seen on Thanksgiving Day since 2008, he said.

Lower gasoline prices could be a reason why more people will be spending more time on the road this holiday weekend. Some 25 percent aren't leaving until Thanksgiving Day, according to a GasBuddy survey. More than 67 percent of travelers are driving more than 200 miles for Thanksgiving, with 36 percent saying they will be traveling more than 500 miles, an increase from previous years.

"The allure of low gasoline prices wasn't causing people to change their plans in terms of hitting the road or not — but maybe they're driving to grandma's house (rather) than somebody else who lives closer," DeHaan said.

Bigger savings elsewhere

Despite the drop in gasoline prices in Las Vegas, motorists around the country are getting much more in savings than Southern Nevada. GasBuddy said the national average could soon fall below $2 a gallon, nearly 80 cents per gallon cheaper than a year ago and $1.29 cheaper than 2013.

Some 20 states have average prices below $2 a gallon and 60 percent of gas stations across the country sell gasoline below $2 a gallon, DeHaan said.

The lowest price found in Las Vegas this week was $2.17 a gallon at Fills, 8816 S. Eastern near Pebble Road.

Drivers appreciated the low prices compared to where they were but lamented why Las Vegas continues to lag behind the rest of the country.

"I don't understand it," said former Las Vegas resident Tony Thompson who now lives in Utah. "Three weeks ago I filled up in Salt Lake City for $2.22 a gallon for diesel and I'm paying $2.37 here. That's 15 cents a gallon for 14 gallons."

Henderson resident Scott Hansen, a corporate pilot who regularly travels around the country, said the price drop won't change his driving habits but added he finds it baffling to see such a spread in prices between East Coast and West Coast.

"Back in Virginia and North Carolina is August, I was paying $1.75 a gallon while it was still $2.80 out here," Hansen said. "I don't why it's taking this long to get here."

DeHaan blames a fire and explosion at an ExxonMobil refinery in Torrance, Calif., in February for keeping gasoline prices artificially high in Southern California, Arizona and Las Vegas — the highest wholesale prices in the country. A report this week said Los Angeles had the highest average price at $2.76 per gallon, while Indianapolis had the lowest at $1.79.

The refinery was responsible for 10 percent of the gasoline supply on the West Coast and may not reopen until early 2016, DeHaan said.

"It affected it quite a bit," DeHaan said. "If that refinery wouldn't have malfunctioned, prices would have been far lower this summer. It probably has led to California and surrounding places like Las Vegas have prices that are 20 to 50 cents higher than areas that are not affected."

More price drops coming?

DeHaan said gasoline prices should decline 10 to 20 cents by the end of the year due to the drop in oil prices. The price hovered around $48 to $49 a barrel on Friday before falling to $39 a barrel this week. It rose to $43 after Turkey shot down a Russian fighter jet, he said.

"It's a trend we expect will continue through the end of 2015, so if you like the prices you see on Thanksgiving, you'll be delighted when Christmas arrives," said DeHaan who added prices should stabilize in early 2016.

The drop has led to a discrepancy among gasoline prices in the valley. Hansen said he saw two stations across from each other at Pecos and Sunset roads with prices differences of 20 cents on the same day.

"When prices plummet, we start to see much more significant variety of prices," DeHaan said. "The spread between the average price and some of those cheap wholesale clubs is pretty significant."

Costco and Sam's Club had prices of $2.18 a gallon on Wednesday, according to GasBuddy. DeHaan said wholesale clubs tend to be aggressive on gasoline prices, even if they lose money, as a way to bring in customers.

"In the current climate where prices have plunged pretty significantly in the last week, some of these stations may have fueled up more recently at a far lower price and they're passing along those savings," DeHaan said. "It also depends on nearby competition. A lot of times where there is a wholesale club nearby it can force the competition to match their prices."

GasBuddy said the highest recorded gasoline prices in Las Vegas during the last seven years was $4.27 a gallon in June 2008, and the lowest was $1.72 in December 2008.