By Neil Johnson, The Gazette
As Janesville resident Lois Smith filled up the tank of her car with gas late this week at Lions Quick Mart on Milton Avenue, a man two pump stations away filled his truck.
Then, the man filled a plastic gas container from the back of his truck. Then a second plastic container. Finally, he broke out a gallon glass jug and filled that with gas.
In the new topsy-turvy economy that has accompanied the COVID-19 crisis, state trade officials are hearing daily complaints over price gouging at retail stores. One price that isn’t inflated right now: that of gasoline.
As of Thursday afternoon, the price at a Mobil station in Delavan had plummeted to 99 cents a gallon. A gallon at a Janesville Citgo station would set you back just $1.28, according to GasBuddy.com.
In Janesville, that’s a dip of 20 cents per gallon compared with Wednesday and a 40-cent falloff from earlier this week.
They’re the lowest prices stations have posted in years, and local gasoline merchants say they’re a function of lower demand and increased production of crude oil in Saudi Arabia and Russia.
The dip in retail unleaded prices is an immediate help to consumers grappling with new economic uncertainties during the coronavirus pandemic, but it presents a challenge for gas stations and convenience stores that are weathering virus-related shutdowns and an economic storm that has led more than 3 million Americans to file for unemployment benefits.
As a consumer, Smith called the plummeting gas prices “daily relief from all of everything we’re dealing with right now with this pandemic.”
“With less driving because of COVID-19 and cheaper gas, a tankful sure goes a long way now,” she said.
But Janesville gas station operator Jim Campbell sees the lower prices as an ominous signal. How ominous? He said he doesn’t yet know.
He pointed out that a person’s gasoline dollar lasts longer when the per-gallon price is low—$15 now might fill a tank instead of only a portion of it—which means fewer trips to the gas station. And that can mean a drop in sales of food and other convenience store products.
That dynamic combined with the state-mandated health shutdown that has left thousands homebound and locked out of their daily driving and spending routines could spell “double trouble” for gas stations, Campbell said, even though they are “essential” businesses under the governor’s safer-at-home order. Gas stations make up a large portion of the overall U.S. economy.
The length of the shutdown and how long gas prices stay low will determine the ultimate impact on stations.
“The trouble is nobody knows anything for sure. What’s going to happen going forward with reduction of sales because of everybody is staying home, we don’t know. We might not know for another month,” Campbell said.
He said much of the supply for local gas stations comes from “fuel farms”—storage stations in Madison and Milwaukee—that get gas piped in from other places.
It’s unclear whether prices might shift soon and in which direction, Campbell indicated.
On Thursday, Milton ethanol producer, United Ethanol, rebuffed questions about how plummeting fuel prices could affect local production of ethanol that is used as a gasoline additive.
Officials at both the Milton ethanol plant and at United Ethanol’s corporate headquarters in Beaver Dam declined comment Thursday afternoon.
Milton City Administrator Al Hulick said on Thursday he was unaware of any changes in production at the Milton plant that would be tied to linked to gas prices, the COVID-19 crisis or other factors.
Top photo: Jerome Flesch uses a plastic bag to avoid touching the gas pump last week at Kwik Trip in Janesville. (Angela Major, The Gazette)