Ohio Gas Prices Get the Drop on Us

By Jim Carroll, Erie Times-News, Pa.

Jan. 20–Pump prices below $2 a gallon haven’t come to Erie yet, but they are getting closer.

Prices have dropped to $1.95 a gallon at the Clark gas station just over the Ohio line in Conneaut.

And with Erie region pump prices stuck in the $2.23-to-$2.29-cent-a-gallon range, lots of Pennsylvania drivers have noticed the difference, and they’re not too happy.

Clark’s assistant manager Kim Rosado has seen more Pennsylvania drivers showing up lately.

“They are saying that Erie is still in the $2.20s and they are willing to make that drive to save 20 cents a gallon,” she said.

Store Manager Ray Asi expects the price to get even better — maybe down to the $1.80s next week.

“I don’t understand why Erie is higher,” Asi said. “Our costs are dropping like crazy.”

Erie drivers are asking the same question.

“Taxes and competition,” are the reasons they would be given by Larry Loughlin, a spokesman for United Refining Co., whose refinery in Warren, Pa., provides gas for Country Fairs, Kwik Fills and other station brands in the region.

Taxes are one reason why gas in Ohio is cheaper than gas in Pennsylvania (by 4 cents), and why gas in Pennsylvania is cheaper than gas in New York. But price differences across the state lines go far beyond differences in fuel tax rates.

Loughlin said much of that difference is due to supply and demand and competition.

Competition can be a factor on many levels, including the number and size of refineries serving a region, and the competitiveness of wholesalers and retailers, he said.

Also, local Pennsylvania pump prices reflect changes in gasoline futures markets, just as other commodities do, Loughlin said.

Clark’s station, for example, gets its gas from refineries in the Cleveland area. Many Erie region stations get their gas from United Refining’s much smaller 65,000-barrel-a-day Warren refinery. “Anything under 100,000 barrels is considered small,” Loughlin said.

Loughlin said gas is a commodity, and prices are subject to changes in futures markets like other commodities. Pennsylvania gas is tied to the futures market in New York, while Ohio gas prices are tied to the futures market in Chicago, he said. “There is a difference in benchmarks.”

“There are a lot of factors, but what it boils down to is that gas is priced to be competitive,” Loughlin said.

Erie, in fact, is competitive among Pennsylvania markets.

AAA reports the statewide average gas price in Pennsylvania on Friday was $2.308; the average price in Erie County was $2.289.

AAA said the average in the Erie region was lower than averages in Allentown, Pittsburgh and Philadelphia, but higher than averages in Harrisburg, Lancaster, Reading, Scranton and York.

But that competitiveness disappears when drivers cross the state line to Ohio, where AAA said the statewide average was $2.004 on Friday, and drivers in the Cleveland area have seen prices at many stations fall into the $1.79-to-$1.85-a-gallon range.

The good news is that gas prices track crude oil prices, and a warm winter that reduced the demand for heating oil has led petroleum prices on a downward trend.

And that led AAA regional spokeswoman Bevi Powell to be optimistic that Pennsylvania prices will be going lower.

“Prices have been going down,” Powell said. “We are seeing prices falling. Some areas are falling faster than others, but they all have been trending downward.”

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