Gas prices keep falling as Memorial Day road trips begin
As drivers head out on traditional Memorial Day weekend road trips, gasoline is still expensive but continuing to decline, with the national average for a gallon of regular gasoline down to $3.809 on Friday after twice flirting with $4 in recent weeks, according to a fuel price survey.
But that doesn’t mean fuel retailers are suffering. Consider the case of Costco Wholesale Corp., which has some of the lowest gasoline prices around. The discount retailer this week reported big profits from fuel and other sales, as people make special trips to Costco for gas and then venture inside the stores.
Costco said it earned $324 million, or 73 cents a share, for the quarter ended May 8, up from $306 million, or 68 cents, in the year-earlier quarter. The discount retailer said much of the gain came from a 16% increase in gasoline sales as motorists faced some of the highest fuel costs in nearly three years.
“Clearly, part of our increased frequency is people coming to get gas and some proportion of those saying, ‘Hey, I’m going to go in and shop a little bit,’ ” Richard A. Galanti, Costco’s chief financial officer, told investors and analysts during a conference call.
Galanti said the company had an especially strong showing among California customers.
“There’s more [fuel] pricing volatility in Southern California than anywhere in the country, I think, and our savings right now, I believe, in California are bigger than other parts of the country,” he said.
California gasoline prices were still among the highest in the nation Friday, at an average of $4.066 for a gallon of regular, even though that was down sharply from $4.222 a month earlier, according to the AAA Fuel Gauge Report, compiled daily by Oil Price Information Service and Wright Express.
And the range in prices was dramatic — enough to save a driver more than $17 to fill up a 15-gallon tank. A Costco in Garden Grove was selling regular for $3.74 a gallon, according to GasBuddy.com, where volunteers post prices they see. On Friday afternoon, the website listed that Costco price as the cheapest in California.
Some major brands were still selling gasoline for as much as $4.91 a gallon, the website showed.
“For motorists, this really is a time when it will pay to look for better fuel prices. You can find gasoline in the $3.80 range now. You just have to look for it,” said Marie Montgomery, a spokeswoman for the Automobile Club of Southern California.
Memorial Day weekend travel is expected to remain at about the same level as last year for Southern California, with high gas prices cutting into the number of drivers but boosting the number of air travelers, Montgomery said.
Prices should continue to fall, barring any major refinery mishaps, said Tom Kloza, chief oil analyst for the Oil Price Information Service. But, Kloza said, falling gasoline prices won’t fuel a summertime rush into long driving trips. The damage of the spring’s high prices is still being felt, he said.
“People are still cutting back on their driving, and during most of June, we’re going to see more demand destruction,” Kloza said.
Oil rose Friday in light pre-holiday trading, adding 29 cents to close at $100.52 a barrel on the New York Mercantile Exchange. In London, Brent crude rose 24 cents to $115.29 a barrel.
