Wisconsin gas prices staying under $4 per gallon
Exploring the factors keeping them there


August 18, 2018

WEST BEND - It’s been more than six years since Wisconsin consumers saw gas prices for regular unleaded higher than $4 per gallon.

Nick Jarmusz, director of public affairs for AAA-The Auto Club Group representing Wisconsin, Minnesota, Iowa and North Dakota, said the highest average price for a gallon of regular unleaded gasoline on record in Wisconsin was $4.20 in March 2012.

As of Tuesday, it was $2.80 in the Milwaukee/Waukesha metro area, which is 50 cents higher than this point in 2017. The state average is $2.81. The national average, according to AAA, is $2.85.

According to www.wisconsingasprices.com, which tracks the state’s historical trends of gas prices as far back as 2007, gas prices have hovered between $2 and $2.90 per gallon since the summer of 2016.

One reason for that is the stepped-up domestic production.

“There are 101 more active oil rigs (built) in the last year, to bring the total to 870 active oil rigs producing domestically,” Jarmusz said. Kundan Kishor, economics professor at the University of Wisconsin-Milwaukee, said, 'U.S. is no longer a huge importer of oil. Import is almost equal to export.'

According to wisconsingasprices.com gas prices in Wisconsin hit $4 for the first time in the middle of 2008. By the end of 2008, prices plummeted to less than $1.76 per gallon. From there, prices steadily increased until it reached $4 by middle of 2011. Then, in March 2012, Wisconsin reached the peak in gas price on record.

When gas hit that $4 number, Jarmusz said, based on AAA’s research, that caught consumers’ attention.

“People made adjustments; more on their dayto- day plans; utilizing more fuel-efficient vehicles,” he said.

When gas was at or near $4 per gallon, Jarmusz said travelers figured that into their planning, such as shortening vacations either in duration or distance. Other adjustments consumers made were to cut back on the type of hotel they stayed at or took advantage of free food offerings such as a continental breakfast.

What AAA found was the biggest impact on consumers’ willingness to travel wasn’t correlated with gas prices, but rather consumer confidence in the economy and job market.

Gas hovered at or above $3 per gallon until November 2014. By January 2015, gas was at $1.95 per gallon. In the following month, gas was at its lowest point since 2008 at $1.50 per gallon.

Since then, prices have gone up, but at a comfortable rate. Gas has stayed above $2 per gallon since the middle of 2016 and hasn’t gotten to $3.

“If it stays below $3, I’m fine with it,” said West Bend’s Jesus Cruz.

Tech advances

Technological advancements have played several roles in the gas prices.

“As with any product, price is determined by supply and demand,” Kishor said. “The demand drove the prices up.”

Kishor added that demand is not what it used to be.

One factor behind that is more cars are being built to be more fuel-efficient. Two, the technology at producing gas has changed, such as being able to do it quicker and more efficiently. Not to mention, electronic cars are working their way into the market.

“It is still a relatively small share of market in electric cars versus traditional vehicles,” Jarmusz said. “I don’t know if it has had an impact on the prices.”

When gas was $4 or more per gallon, Cruz commuted an hour-and-a-half each day, spending $40 per day on gas.

“That sucked,” he said.

South Carolina pays the cheapest per gallon at $2.52, while Hawaii pays the most — $3.71.

Gas tax

Over the last several months, there has been debate about road repairs in the state. Gov. Scott Walker has made it clear he doesn’t want to raise the gas tax to help fund those repairs, unless a cut is made elsewhere.

With Walker up for reelection, the opportunity is there to change the gas tax.

Cruz said he’s not worried about a gas taxincrease, if it happens. He believes the prices would go up only a few cents per gallon.

As for the gas tax, Wisconsin is right at the national average of 31.04 center per gallon — 30.9 cents. Alaska pays the cheapest at 12.25 cents per gallon, while Pennsylvania pays the most — 58.2 cents.

Wisconsin’s gas tax has been at 30.9 since 2006 when the Legislature eliminated the annual indexing adjustment.

“I’m very reluctant to raise,” said Timothy Ramthun, newly elected representative of the 59th Assembly District. “But something has to give.”

In a provided statement, Democratic gubernatorial candidate Tony Evers criticized Walker about the road conditions and said: “I will work with legislators from both sides of the aisle and do whatever it takes to find the solution.”

Also, Kishor said there shouldn’t be concern about any possible tariff battle over foreign oil under President Donald Trump.

“My guess is oil is less sensitive to tariffs and the tariff war,” Kishor said.

ndettmann@conleynet.com (262) 306-5043