Chattanooga gas prices make uncharacteristic springtime drop

Chattanooga gas prices make uncharacteristic springtime drop

Oil glut yields unusual seasonal decrease in cost

March 20th, 2017 by Dave Flessner in Breaking News

Cheapest gas cities

1. Rockhill, S.C. — $1.93 per gallon

2. Spartanburg, S.C. — $1.95 per gallon

3. Aiken, S.C — $1.96 per gallon

4. Cleveland, Tenn. — $1.96 per gallon

5. Greenville, S.C. — $1.96

6. Morristown, Tenn. — $1.97

7. Sumter, S.C. — $1.97

8. Chattanooga — $1.97

Source: GasBuddy.com surveys in 453 metro cities across America

Springtime began Monday with an unusual drop in the cost of filling up your vehicle's tank.

The average price of gas in Southeast Tennessee fell for a third consecutive week last week, dropping another penny and a half per gallon in Chattanooga to only $1.97 a gallon.

According to surveys of gas prices in 483 U.S. cities by the online web site GasBuddy.com, Chattanooga and Cleveland, Tenn., are two of the eight lowest-priced cities in America this week for fuel. Only South Carolina, which has one of the lowest state gas tax rates in the nation, has cheaper gas than East Tennessee, GasBuddy.com said.

Gas prices typically rise about 20 cents a gallon between February and March as refineries switch to more expensive summer blends and increased driving spurs more demand for fuel. But Chattanooga gas prices are actually down by 4.5 cents per gallon in the past month.

"Only one time before in 2009 did we see an actual decline in gas prices from February to March and we have seen increases in this period of up to 43 cents per gallon," said Patrick DeHaan, senior petroleum analyst for GasBuddy.com.

Gas prices in Chattanooga are still 15.3 cents per gallon above a year ago when gas reached a two-decade low in early 2016. But the price of gas in Chattanooga is still a dime per gallon cheaper than two years ago and 64 cents per gallon cheaper than it was ffive years ago.

"After OPEC's production cutbacks in November, oil prices were quick to jump to $51 per barrel, but we've seen a bit of a glut on the market since and with more oil rigs coming online in the United States, oil prices have moderated and we're seeing lower prices at the pump as a result," DeHaan said.

In the past week, 14 oil rigs were added in the United States to boost the number to 631, the most since September 2015.

In trading on the New York Mercantile Exchange Monday, crude oil prices fell 56 cents per barrel to $48.22 per barrel.

"I think oil is reacting still to the steady rise in the U.S. rig count and the realization that momentum is building to the downside from the repositioning of speculative interests in the market," said John Kilduff, partner at Again Capital in New York.

Electric bills to rise in April

While gas is getting cheaper, the Tennessee Valley Authority will make a slight increase in electric rates in April, due in part to less abundant rainfall compared with last year.

Electricity rates have dropped for three consecutive months due to cheaper natural gas and the addition of another nuclear reactor for TVA. But next month, the typical Chattanooga household will pay 48 cents more on their electric bill, or about three-tenths of a percentage point more than what a typical EPB customer would pay for the same power this moth.

Although electric prices have fallen through most of this year, TVA spokesman Scott Brooks said a drier winter has cut TVA's cheapest power source, hydroelectric power from TVA's 29 power-generating dams.

Increases in fuel expenses last spring and summer, combined with base rate increases by TVA and EPB last year, will mean the typical residential electric user in Chattanooga will pay about 3.9 percent, or $5.17 more for the same monhtly amount of power as what they paid last year.

Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.

Lowest Gas Prices in Chattanooga
Chattanooga Gas Prices provided by GasBuddy.com

This story was updated March 20 at 11:15 p.m. with more information.


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