Will Lowering Gas Taxes in Montana Make the Problem Worse?

According to Chief Petroleum Analyst for Gas Buddy, Patrick DeHaan, the only control Missoula consumers will have on gas prices for the foreseeable future is simply conserving gas by driving fewer miles.

KGVO reached out to DeHaan on Monday for an update on the meteoric rise in oil and thereby gas prices in Missoula.

“Average gas prices in Montana have risen about nine cents a gallon in the last week, the statewide average now $4.09 per gallon,” began DeHaan. “It's the first time we've seen that $4.00 per gallon mark in quite some time. Average prices in the last week nationally have actually slipped about a penny a gallon. Much of the West Coast, however, is seeing tightness led by California refineries that are having a few kinks here and there, tight gasoline inventories in the Rocky Mountains as refiners start to transition to more expensive summer gasoline and the volatility in oil prices is certainly not helping either.”

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DeHaan said diesel prices are far higher than regular gasoline, and most of our food and other consumer products arrive by trucks powered by diesel fuel.

“Diesel prices have already eclipsed that mark (of $5.00 per gallon), in fact, Missoula right at $4.99 or $5.02 for diesel, that's what we're seeing countrywide,” he said. “The average price for diesel now $5.11 a gallon.  A lot of that is because of continued imbalance when it comes to diesel, or what we call distillates, is that there's been much more demand than there is supply and so that's pushed diesel prices up to record levels.”

DeHaan was asked about suggestions that the U.S. government and states lower, or temporarily eliminate, state and federal gas taxes to reduce the price of gas for consumers. He said that would be a very bad idea.

“That could act to boost gasoline consumption by reducing the price and that can make the problem much worse,” he said. “If people don't have to pay as much for gasoline,  they're unlikely to make behavioral changes to reduce their consumption. So when you see a state doing a ‘gas tax holiday’ or issuing gas cards to offset the rising price, that could make the problem down the road much worse because Americans will hold off on making behavioral changes that reduce their consumption.”

DeHaan said despite America’s total dependence on their cars and trucks, reducing demand is the only way to save money on gas.

“If motorists really wanted to get serious about reducing prices and helping to push them down, then we could really take steps to reduce our consumption through driving more fuel efficiently by combining trips, and all sorts of behaviors basically, to conserve and reduce our consumption of gasoline,” he said. “That's really the only way we get out of this is when Americans start to curb their consumption.”

On Friday, Los Angeles became the first major city in the U.S. to reach an average gas price of $6.00 or more. In Missoula, the price for regular unleaded averages $4.09 per gallon.