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Gas prices drop rapidly, expected to stabilize soon

Published: Wednesday, July 3, 2013 5:30 a.m. CDT • Updated: Wednesday, July 3, 2013 6:23 a.m. CDT

Almost as quickly as they shot up, local fuel prices have come down, providing relief to motorists hitting the roads for the Independence Day holiday weekend.

This week, the price of a gallon of regular unleaded gasoline ranges from $3.35 to $3.75 a gallon in the Tri-Cities and surrounding communities. That marks a drop of 15 to 25 percent, depending on the service station and town, compared to the price motorists in the area were paying for gasoline in mid-June.

At that time, local fuel prices surged from slightly more than $4 a gallon during the Memorial Day weekend to more than $4.40 a gallon, threatening to challenge the all-time high gasoline price of $4.51 a gallon set in the spring of 2012.

The price run-up bucked historical trends, in which fuel prices normally decline after the Memorial Day holiday travel period. In June, industry analysts and local fuel distributors pinned the blame for the price jump on local refinery issues, which they said artificially suppressed the local supply of gasoline.

“It created a supply issue, but it was limited to just here,” said Pete Mancini, president of St. Charles-based fuel distributor and service station operator Parent Petroleum. “The Chicago market was in a tough situation.”

Those high prices, however, enticed suppliers from other U.S. markets to divert fuel to the Chicago area, Mancini said. Once local refineries began producing fuel at normal levels, prices rapidly dropped to bring the Chicago market more in line with national average prices.

Prices elsewhere in the Chicago market still average more than $3.90 a gallon. But they still are down 12 percent from mid-June, when gasoline averaged $4.48 a gallon in the Chicago area, according to fuel price tracking site GasBuddy.com.

Mancini said prices in the Tri-Cities have been driven even lower thanks to competition among local stations.

Mancini said he expects the local price of fuel to stabilize soon, and for the price to remain around $3.40 to $3.60 a gallon for the remainder of the summer, barring any significant disruptions to supply.

“We wouldn’t have gone anywhere near as high as we did if things were normal here,” he said. “Now, I think we’ll be where we are for a while.”

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