80-cent gas price drop brings promising holiday
HOUGHTON – Michigan gasoline prices have dropped 80 cents per gallon in less than a month, just in time for the Fourth of July travel season.
According to AAA’s daily fuel gauge report, today’s state-average price of $3.43 per gallon is the lowest in a steady stream of price declines from $4.23 on June 6.
“The last couple months there have been major issues at two of the bigger refineries,” said Nancy Cain, spokesperson for AAA Michigan. “They’ve been back online, and we started seeing prices dropping. There’s no issues right now at any of the refineries.”
The ExxonMobil refinery in Joliet, Ill., came back from major maintenance problems on June 10, while the BP Whiting refinery in Indiana has been gradually coming back and is almost at full service now. Michigan prices, accordingly, have dropped from $4.21 on June 10 to $3.94 on June 17, $3.64 on June 24 and $3.44 Monday before today’s recent low of $3.43 (it was $3.40 on July 2, 2012). “Unfortunately, they tend to go up much faster than they come down,” Cain said. “It’s still a fairly major drop, which is really good for the tourism industry.”
The Fourth of July period is generally the busiest travel holiday of the year, and this year is no exception, according to AAA and IHS Global Insight’s travel projections and economic forecasting.
Nearly 1.4 million Michigan residents are expected to travel during the July 3-7 holiday travel period, down about 1 percent from last year, primarily due to a slightly shorter travel period with Independence Day being on a Thursday this year. It was on a Wednesday in 2012.
According to Cain, gasoline prices historically jump slightly just prior to the holiday travel period, but because this year has been so unusual, they may not this year.
“With lower gas prices and a forecast of good weather, it could spur people to decide last minute to travel during the holiday period,” she said.
“… This really is the summer season. A lot of folks on Memorial Day (when 1.1 million Michigan residents travelled) the weather isn’t quite warm enough, and on Labor Day (when 1.2 million travelled) a lot of people are thinking about back to school. July 4 is typically the busiest period.”
Julie Sprenger, member of several state and local tourism organizations and co-owner of the Laurium Manor Inn, agreed with Cain. “I actually think that we’re going to see a really strong Fourth of July. Gas prices psychologically will play into it,” Sprenger said.
She said at Laurium Manor Inn, about 40 percent of room assessments, or what the inn has to pay the state on rooms, are paid in June, July and August, most in the latter two months. “July and August are always our strongest. It always is, it always has been and it probably always will be,” Sprenger said.
May is largely weather dependent, and several festivals throughout the month and early June keep a steady flow of tourists, and the fall color season brings people to the Copper Country as well, but, just as is typical almost worldwide, mid-summer is the peak season for family vacations.
While Sprenger noted that people are “conditioned” to high gasoline prices, even fairly significant fluctuations in prices don’t have a major effect on a trip’s bottom line (15 percent of total trip costs, according to IHS). However, if out-of-town tourists are freed up to purchase one extra meal or locals are given the extra financial incentive to travel to Copper Harbor for Fourth of July fireworks, it can have a positive impact on the local economy. “I’m pleased that gas prices are down,” Sprenger said. “Maybe people will spend a little more in a retail shop or restaurant if they have a little more discretionary dollars.”