Rochester’s Falling Gas Prices: They’re Practically Giving It Away

It was only a little over a year and a half ago, in the spring of 2013, when gas prices here in southeastern Minnesota were hovering near the $4.25 a gallon mark. Thankfully, those days are gone, and as everyone has noted, just about everywhere in Rochester today you can fill up the family truckster for under $2 a gallon!

I filled up today for the bargain price of $1.95/gallon. When was the last time it was that cheap? GasBuddy.com has tracked what we've been paying for gas over the last decade or so. You can see the chart, and it's recent downfall, HERE.

But why is it now so much cheaper than just two years ago? Well, I'm no economist, but from what I've read, the laws of supply and demand might have something to do with our falling prices. According to several reports, demand is down across the globe, as an economic slowdown in other parts of the world starts to take its toll. Couple that with the increased production in North Dakota, and voila, the price of crude starts to nosedive-- as does the price at the pump.

So it's a good thing, right? I'm mean, I'm not complaining about only spending around $30 to fill up my SUV instead of the $50 or more I had been spending! But another report I read said that because the supply is so high and the demand is low right now, it's not profitable for some of the North Dakota producers (who have to use more costly methods to extract the crude oil from deep inside the earth), which could, in turn, lead to less production. Which would then increase the price again. Which would lead to more producers. Which would then decrease the price again? Who really knows?!?

Like I said, I'm no economist-- and even THEY disagree on what this price drop will mean in the long term. But, in the meantime, you won't catch me complaining. What say you?