As autumn settles in, small business owners across the country may find a welcome decrease in gas prices, reflecting a shift in the market that could benefit their bottom lines. According to recent data, the national average for a gallon of regular gas has dropped to $3.15, down five cents from last week and marking a decline compared to $3.21 a year ago. With the arrival of fall, winter-blend gasoline—which is cheaper to produce—is beginning to hit the market, providing additional financial reprieve for small businesses reliant on transportation and fuel costs.
In an environment where every cent counts, the latest trends in gas pricing offer both opportunities and challenges. The U.S. Energy Information Administration (EIA) reported an increase in gasoline demand, rising from 8.81 million barrels per day to 8.95 million over the past week. However, domestic gasoline supplies have tightened, decreasing from 217.6 million barrels to 216.6 million barrels. These fluctuations can affect operational costs for small businesses, particularly those reliant on delivery services or transportation.
“Today’s National Average: $3.157,” states the AAA Gas Prices report. “One Week Ago: $3.203.” This downward trend is notable as small businesses, particularly in the service, retail, and logistics sectors, usually feel the pinch when fuel prices increase. Benefits from lower fuel prices can result in decreased transportation costs, potentially allowing small businesses to allocate resources towards other critical areas such as marketing or hiring.
However, while current gas prices provide relief, certain market dynamics warrant attention. For example, the report notes that the Atlantic hurricane season, although halfway through, remains a concern. Storm activity in the Gulf could disrupt refinery operations, affecting fuel availability and prices. Small business owners should be aware of these potential disruptions and plan accordingly, especially if their logistics are heavily dependent on timely fuel availability.
“At the close of Wednesday’s formal trading session, WTI rose $1.58 to settle at $64.99 a barrel,” the report adds. Increased crude oil prices can trickle down to gas prices if inventory levels drop further. Currently, U.S. crude oil inventories sit 4% below the five-year average for this time of year, presenting a precarious balance.
For small business owners considering the electric vehicle (EV) market, the national average per kilowatt hour for public EV charging remains steady at 36 cents. Investing in electric vehicles could offset some dependence on gasoline, especially as consumers become increasingly inclined toward eco-friendly transportation options. However, the variability in charging costs—including high rates in states such as Alaska at 51 cents per kilowatt hour and low rates in Kansas at just 25 cents—calls for careful evaluation of geographical advantages.
Keeping an eye on regional variations in gas prices can also be crucial for business owners, especially those with a multi-state presence. The AAA report lists states with the highest gas prices, including California at $4.64 per gallon, compared to Mississippi’s low at $2.68. Such disparities can impact operational costs significantly, leading to a shift in business focus or strategies based on location.
To assist in navigating these changes, small business owners can utilize tools like the AAA TripTik Travel planner, which helps users find current gas and electric charging prices along their routes. This resource could enhance productivity by streamlining travel costs and aiding in budget planning.
As fall progresses and prices fluctuate, small business owners should remain informed and agile. The shift to lower gas prices can provide immediate financial relief, especially for those observing changes in fuel consumption. However, it’s crucial to remain vigilant about the broader economic landscape, including supply chain factors that could reshape fuel availability and pricing.
For further information, read the full press release from AAA Gas Prices here.
Image via AAA
This article, "Gas Prices Drop to $3.15 National Average as Fall Savings Begin" was first published on Small Business Trends
