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Gas falls below $2 in Mid-Michigan

Posted: 9:03 AM, Nov 24, 2015
Updated: 2015-11-24 09:03:36-05

Gas prices in Charlotte are hovering around $1.70 at most gas stations.

Even though that's about 25 cents below the break-even point for gas right now, according to Mark Griffin of the Michigan Petroleum Association.

"It's a price war, an old-fashioned price war," Griffin said. "They probably aren't going to be able to keep doing that."

Gas stations in outlying towns like Charlotte drive prices down to bring in customers, and also to help the brand in general by competing to be the company selling the cheapest gas in the area. He says prices that low will probably jump back up to the regional average - about $2 per gallon - during Thanksgiving weekend. "Demand will be up very high. A lot of people will be on the road, so I don't believe that you will see these 20-, 30-cents-per-gallon-below-cost sellers continue through the holiday weekend," Griffin said.

The cost of crude oil, and the overall cost of gas stations to sell gas has gotten cheaper this week, he says. "Our cost has come down in the past week about a dime, and you're seeing that reflected in the retail prices, hopefully that continues," Griffin said. Just not as cheap as some Charlotte stations make it seem.

"The good news is customers are saving money from where they were in June and July," Griffin said. "Hopefully that will translate into not only better in-store sales for us, but for the rest of the economy as well."

Kimberly Hughes, who drives from north of Mt. Pleasant to Lansing frequently, says she's noticed major savings since gas prices came down. "The gas prices actually make a lot of a difference," Hughes said.

The average driver buys 12 gallons of gas per week. When prices are down $1/gallon, that means drivers save about $50 per month.

"I usually spend the money that I save on bills," Hughes said. But heading into the holiday shopping season, she says she'll probably spend some of her savings on that, too.

Griffin says gas stations benefit from lower gas prices, too, as counter-intuitive as that may sound.

"The lower the price of gasoline, the more money in our customers' pockets, the more they spend inside the store," Griffin said. "If it's good for our customers, it's good for us."

Griffin says while prices that have been held artificially low will probably bounce up this holiday weekend, average gas prices in Mid-Michigan should stay around $2 per gallon.