GRAND RAPIDS, Mich. — Gas prices continue to drop in Michigan during the month of March. According to AAA, Michiganders are currently paying an average of $1.996, which is 24 cents lower than the national average of $2.237. In Grand Rapids, prices are as low as $1.85.
According to Patrick DeHaan, an expert at Gas Buddy, oil prices have dropped to the lowest cost in ten years and gas prices could still continue to fall.
"You ain't seen nothing yet. There’s more downward potential in the days and weeks ahead. We could go down another 20, 40 cents a gallon," he explained.
DeHaan attributes the sudden drop in price to the coronavirus pandemic, saying it's caused a lower demand for gas and oil.
"We’re not driving as much and that is happening around the globe. Italy, France on lockdown, the Chinese cities were locked down. This is all meaning lower oil demand," he explained.
There is also tension in the industry with leaders arguing over production levels.
"There was a fist fight, essentially a cat fight if you will, between the largest oil producers, Saudi Arabia and Russia. Instead of cutting production, they boosted production, and that’s what’s giving us with low-price environment. But if it wasn’t for coronavirus, they wouldn’t have had to have those conversations," DeHaan explained.
He added that the lack of demand created a "speedway effect" in which gas stations get competitive to match the lowest price.
"The speedway effect is really bringing prices down much faster here in the Great Lakes than anything else... That could actually push us deeper into more discounts and could push prices to that 99 cent a gallon mark," DeHaan said.
While lower prices may be good news for drivers, DeHaan said it could be a sign of what's to come for the economy.
"It’s the sign of a struggling economy, and the real collateral damage could be tens of thousands or hundreds of thousands of jobs in the oil and gas industry that are suddenly at risk, because oil prices haven’t been this low in 10 years," he said.
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DeHaan is encouraging drivers to take advantage of the price dip while they can and to shop around for the best price.
"Don’t be in a rush to fill up, and one big caveat people’s sensitivity goes down they think $1.99 is a good deal, and they might go down the street or wake up tomorrow and prices may be $1.69," he said.
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