Gasoline Prices Fade, May Boost Back-to-School Spending

By Tom Bacon

Parents of Inland Northwest kids may get a little more breathing room in their back-to-school spending decisions, because the cost of gasoline is dropping. But even if lower gasoline prices don't provide all that much of a spark for increased spending on backpacks and school supplies, the downward trend should at least reduce the grumbling and muttered curses at the gasoline pumps.

The cost of an average gallon of unleaded self-serve gasoline in Washington and Oregon right now is $3.90, but as usual, lower in Spokane at about $3.77 a gallon. That's still high, but nearly a nickel less than the cost a year ago, and still sliding downward.

In Idaho, the average cost is even lower, at $3.77 a gallon and all the way down to $3.60 on average in the Coeur d' Alene area. The primary reason? Crude oil, the west Texas crude benchmark grade, for example, is selling for less than a hundred dollars a barrel. Crude oil prices make up about 67 percent of the retail cost of gasoline.

That trend is somewhat of a surprise to some economists, who feared a spike in oil prices because of the fighting and chaos in the middle east. Despite the risks to mid-east oil production, world supplies are ample, and there's even a glut in the mid-Atlantic basin.

The US Energy Information Administration predicted Tuesday that gasoline prices will continue to drop nationwide through the winter months, possibly dropping to $3.30 a gallon by December. That would be good news for drivers and for retailers selling back-to-school items.
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