Saturday, March 24, 2012
By Karl Henkel
YOUNGSTOWN
As gas prices continue to surge in the Mahoning Valley and across the nation, many economists predict the pain at the pump will suffocate consumers’ wallets.
Some stations, like the Sunoco on Fifth Avenue in Youngstown, had prices as high as $4.09 per gallon Friday afternoon.
But as one form of gas rises — the average cost of regular-grade gasoline is up to $3.88 per gallon in the Valley — another remains at record lows: natural gas.
Natural gas prices are less than $2.30 per million British thermal units on the New York Mercantile Exchange, slightly above the 10-year price lows from earlier this month.
That figure is about half the cost of natural gas last year at this time.
The price of regular-grade gasoline a year ago was $3.46 per gallon.
The natural-gas figure is also well below the $13.50 average per BTU in 2008, the last time vehicle fuel prices surged above $4 a gallon.
But are the savings on natural gas prices canceling out the added burden of automotive fuel prices?
“It’s an interesting concept,” said Cleveland-based economist George Zeller.
“The main impact of natural-gas prices come during the wintertime. With the gas process, it’s usually the other way around. You usually get the higher prices in the summer.
“Part of it is the timing.”
Low natural-gas prices coupled with a mild winter — the Valley has had 53.1 inches of snow, with 54.4 inches being the normal total for an entire winter, just a year after setting an all-time snow record, according to the National Weather Service — has meant savings for businesses and homeowners alike.
“With warmer temperatures, we have less need for heat, so we have a natural savings there,” said Ken Kollar, mall manager at Eastwood Mall in Niles. “[The savings] is pretty substantial.”
Michelle Daugherty, 45, of Girard says she has experienced similar savings when it comes to home heating, but those are quickly offset by automotive fuel costs; on Friday, she filled up at $3.85 per gallon at a Shell station in Girard.
“I have noticed a definite difference,” she said. “But I still think I’m paying too much for gas overall.”
Some in the Valley say they’ve given up eating out and clamped down on spending discretionary income.
The overwhelming response, however, is that high gas prices are causing Americans to spend less money — on gas.
MasterCard SpendingPulse reported Friday that gasoline consumption plummeted 4.2 billion gallons, or about 3 percent, in the past year, though some attribute the decline to a shift toward fuel-efficient vehicles.
That, Zeller said, shows the impact of high gas prices on economic growth.
“It already has affected growth to an extent,” he said. “We are [still] getting growth. That’s good, but it’s too slow.”