The High Cost of Low Gas Prices During The Coronavirus Pandemic

CHARLOTTE, N.C. – Gas prices, falling as the coronavirus pandemic persists. Off Wilkinson Boulevard in west Charlotte, regular gas was $1.34 a gallon Friday. Charlotte is averaging $1.75 a gallon, North Carolina is $1.69 and South Carolina is $1.62. Seems great, but with stay at home orders in place, gas reserves pile up as far fewer people fill up. “If no one’s buying the gas, I mean, how good of a thing is that, really,” says Tiffany Wright of AAA Carolinas.

Wright predicts gas prices will continue to fall through at least mid-May. She says, “Typically they shoot up like a rocket and they fall like a feather, but right now, it’s the exact opposite.” She continues, “Are we gonna see a dollar a gallon? Are we gonna see under a dollar? You know, I never say never, but there’s a possibility that we could see that.”

In fact, some places around the country are already seeing it. It’s 92 cents a gallon at least one pump in Wisconsin. And 99 cents at at least one pump in Oklahoma.

Oil Price Information Service data shows more than 1,700 of the country’s 130,000 gas stations are now selling gas for a $1.05 a gallon or less. “It’s very good for the consumer at times when they go to the pump and fill up cheaply, but the businesses that bring that gasoline to the marketplace, they need to be able to operate,” says Fort Mill-based financial planner Michael Baker.

Baker points out that just like every other industry, gas companies need to be able to pay their workers, their suppliers, and at least break even. If they survive this, they’ll price recover gradually, and Baker will view it as a welcome sign. He says, “The way I would look at the rising gas prices, I would not look at that to be a bad thing.”

OPEC, a group of major oil producing nations, agreed a few days ago to cut oil production in an effort to balance the market. Experts say the move is not likely to do enough to fix the demand crisis.