June 25th, 2018

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Energy News: Gas Prices
Gas Prices Hit ‘Pain Point’ For Nevada Drivers
By Frank X. Mullen

 Barney Rutledge of Reno, a freelance commercial artist, says he planned to become a driver for the ride-sharing services Uber or Lyft this summer in order to supplement his income. Not any more.

“It just doesn’t make sense with gas prices the way they are,” he says. “One trip to Incline Village, South Lake (Tahoe) or Fallon,” he says, would eat up a significant portion of the day’s profit. “As a driver, the gig economy is at the mercy of gas prices.”

He’s not alone. Nevadans who commute long distances for work or who are planning auto trips this summer should brace themselves for the highest gas prices in five years. Last month, the national average price for a gallon of regular gasoline edged the $3 mark for the first time since 2015, according to the American Automobile Association.

In Nevada, average prices topped $3 a gallon in April and are expected to continue to soar this summer, with some stations in the Northern Nevada already crossing the $4 threshold, as they did in 2013.

By mid-May, a Chevron station at Sierra Street and Interstate 80 in Reno posted a $4.29 price for regular gas. That station may only be slightly ahead of the coming trend.

Nevada, California and Hawaii last month posted prices about $1 over the national average, according to AAA surveys. Economists say that prices of $3.50 per gallon is the “pain point” when motorists start to curtail their driving.

If so, $1 higher may well be the “agony” threshold, particularly for drivers already living on the edge of a budget.
 
Theresa Gomez, a waitress and musician from Henderson, says Las Vegas-area prices were hovering above $3 a gallon last month and she expects them to climb much higher by July 4, let alone Labor Day. She drives a 2002 Ford Expedition, which carries her band’s equipment, but is a “gas pig,” she says. She also owns a Yamaha motorcycle that she hasn’t ridden in several years, but “it’s coming out of mothballs this summer” to keep her fuel costs down.
 
“The beast (her Expedition) gets about 11 miles per gallon on a good day,” Gomez says. “That’s unsustainable.”

In Incline Village and South Lake Tahoe, where drivers who need to fill up have few choices for gas, prices in May were already above $3.68 per gallon and topping $4 at some stations. The prices there, as in the rest of Washoe County, are pumped up by high county excise taxes. Washoe’s per-gallon combined gas tax is 86 cents per gallon and Clark County’s gas taxes stand at 62 cents, as compared to 52 cents per gallon in Carson City. The state’s rural counties, which tack on an extra five or 10 cents per gallon to state and federal taxes, always have lower pump prices than the three major population areas. The national gas tax is 18.4 cents per gallon and Nevada’s state tax is an additional 23 cents per gallon.

The combined taxes don’t change with gas prices, which now are under upwards pressure from several variables, including oil refineries’ “spring maintenance,” as fuel blended for winter use is switched to the more expensive summertime mixture. Other factors include growing demand, a stronger economy and higher oil prices. Crude oil sales climbed to above $77 per barrel last month as compared to an average $40 a barrel last summer and some analysts predict $100 per barrel oil by next year. The Trump Administration’s decision last month to blow up the Iran agreement also spurred oil prices higher.
 
“There’s not much I can do about it,’ says Marilyn Williams, who was filling up her Toyota SUV at the Flying J service station in Fernley last month. “I’ve got to drive and the car has to have gas… Just pay, scream, and hang on.”

She says it make sense to shop around. She notes that the Flying J, a truck stop just off Interstate 80, usually has the lowest prices in Fernley. The downside, she says, is that the station is crowded during weekdays. “You want to time your visits,” she says.
 
Bruce Kinney of Truckee, Calif., says he travels between Lake Tahoe and his home several times per week and has noticed prices bounding upwards as much as 8 cents per week this spring. “I keep seeing stations with $4 a gallon, just like several years ago,” he says. Kinney says because he travels for business, he can deduct mileage on his taxes, but he takes a standard mileage deduction which he says doesn’t take rising prices into account.

Drivers who want to shop for the lowest prices in their areas can consult GasBuddy.com, which uses crowd-sourcing to list the best deals. According to GasBuddy, historic averages have varied widely over the last five years: $2.65 per gallon in 2017; $2.45 per gallon in 2016; $2.79 per gallon in 2015; $3.58 per gallon in 2014; and a record high of $3.75 per gallon in 2013.

AAA also offers a gas cost/trip calculator.

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