With oil prices suddenly dropping precipitously, is cheaper gasoline next?
Yes, "people will see some relief at the pump," said Dan Ronan, a spokesman for AAA Texas/New Mexico, in an interview Thursday.
However, it could take a week or two for the full effect of falling oil prices to be reflected at the pump, Ronan said.
If oil prices remain at reduced levels, or fall further, some retailers will lower their pump prices sooner than others, said Clay Gilmer, vice president of fuel for Reeder Distributors, a wholesale fuel and lubricant distributor based in Fort Worth.
A big gasoline retailer that receives new shipments of fuel daily is likely to lower prices "real quick," Gilmer said. A small neighborhood store that might get only one fuel shipment a week will likely react slower, he said.
Gilmer said Reeder saw a large midday drop of about 9 cents a gallon Thursday in the spot-market price it pays for gasoline and diesel fuel.
Ronan said a gasoline retailer wouldn't want to lower pump prices immediately if it means taking a loss on gasoline still in its tanks that it bought at a high wholesale price.
The plunge in oil may be enough to keep pump prices from reaching a national average of $4 per gallon, said Fred Rozell, retail pricing director at Oil Price Information Service, a private research and consulting firm.
"I wouldn't be surprised if we dropped to about $3.50 by the middle of June," Rozell said.
Expensive fuel bills can crimp customers' spending habits. Earlier in the week, reports from MasterCard SpendingPulse and the Energy Department showed that Americans bought less gas in the final week of April.
On Thursday, some retailers warned that soaring gasoline prices are starting to cut into the spending power of lower-income customers. Also, the government said that the number of people applying for unemployment benefits reached an eight-month high. Distress in the job market depresses gasoline demand, analysts say, because large numbers of Americans drive to work.
Gasoline prices have been approaching all-time highs in the Fort Worth-Arlington area, with the average price for a gallon of regular at $3.89, according to a report Thursday by auto club AAA, Oil Price Information Service and Wright Express. Midgrade was at $4.03; premium, $4.17; and diesel, $4.02.
The record-high average for regular in the Fort Worth-Arlington area was $3.98 on July 16, 2008 -- just 9 cents above Thursday's average.
This report includes material from The Associated Press.
Jack Z. Smith, 817-390-7724