Cash customers are driving in droves to the Astro gas station on Riverside Avenue in Medford to fill up with regular at $1.90 a gallon.
“This is the cheapest cash price in town,” said driver Christian Swank, a 31-year-old Medford resident.
Swank and other local motorists are celebrating 15 local stations that offer gas at less than $2 a gallon, but experts say all that cheaper fuel comes at a price.
Dan Rubenson, economics professor at Southern Oregon University, said low gas prices are good for consumers but bad for those who work in the oil industry, particularly ih the oil fracking boom in many parts of the country. It's also contributing to instability in stock markets around the world.
Over the past several years, Rubenson said, oil production has increased, but demand hasn’t kept pace as nations become more efficient in their use of energy. At the same time, China’s economy has slowed and so has its need for oil.
On a national level, many consumers have banked the savings from lower gas prices, either by putting it away or paying down debt, Rubenson said.
“It helps people to get their personal balance sheets in shape,” he said.
Low gas prices might help in the short term, but a slowdown in the Chinese economy could hurt Oregon in particular, Rubenson said.
“Oregon is a little more susceptible,” he said. “Oregon has a trade surplus with China. We’re a little more sensitive to downdrafts from over there.”
In particular, the Oregon electronics and agricultural industries ship a lot of products to China, Rubenson said.
Looking at the economic data, Rubenson said, he doesn’t see any obvious signs of a slowdown in the U.S. economy despite the oil issues and faltering world economy, though the stock market has taken a beating lately. The Dow Jones Industrial Average rebounded a bit Friday, climbing nearly 211 points — in part on reports of oil prices climbing.
“We’ve been doing a little better than most of the world,” Rubenson said. “But a lot of policy makers in Washington can do things to screw things up.”
The average price of a gallon of regular is $2.12 in the Medford area, according to AAA Fuel Gauge Report on Friday. That’s less than half of the all-time high of $4.38 on July 11, 2008. Gas Buddy.com lists the average at $2.08.
Many local gas stations offer up to 10 cents off the price of a gallon of gas for drivers paying in cash.
“Who doesn’t love lower prices?” Marie Dodds, spokeswoman for AAA in Oregon and Idaho, asked.
But, she added, there are two sides to every story.
Concerns are being raised about the glut of oil worldwide. Oil producing nations, many of which are in the Middle East, have decided to maintain production to get rid of competition, Dodds said.
“OPEC’s (Organization of the Petroleum Exporting Countries) long-term goal is to drive North American companies out of business,” she said.
With trade sanctions being lifted, Iran will also begin selling oil on the international market, which has helped drive down the price of crude, Dodds said.
In June 2014, a barrel of oil reached a record high of $107, Dodds said. On Friday, the price had bumped up from lows around $27 a barrel to $31 or $32, Dodds said.
In the meantime, motorists should enjoy the lower prices, Dodds said. Prices should remain relatively low for the remainder of the year, she said, with a slight increase expected during the summer months.
Dodds said the cheapest gas she saw in the Medford area was Costco at $1.92 a gallon, though many stations offer cash discounts. Stations in some parts of Jackson County, particularly in rural areas and just over the border, are selling at more than $2.40 a gallon.
The $2.12 average price of regular in the area is just under the statewide average of $2.13. Nationally, the average is $1.85.
The Medford area typically has higher prices than the northern part of the state, partially due to the “California effect,” Dodds said. California often has some of the highest prices in the nation.
Dodds said she suggests thrifty motorists should just get their gas at the cheapest stations.
"You don’t have to worry about quality of gasoline — it’s all tested," she said. "The different brands of gasoline don’t matter."
Worldwide economic impacts aside, consumers enjoyed the low pump prices at the Astro station on Friday, with many of them paying in cash to get a discount.
“It’s wonderful, but it should be even cheaper,” said Jimmy Brainerd, a 64-year-old Medford resident. Instead of paying the $40 a tank he forked over in the past, he could barely squeeze $16 worth of gas into his economy car Friday.
David Runkel, a 74-year-old Ashland resident, puts premium in his Volkswagen turbo so he’s happy to hand over cash to get a nice discount. “Hey, it saves a buck a tank,” he said.
As cheap as gas is, it’s nowhere near as cheap as when he was growing up, Runkel said.
“I remember when it was a quarter,” he said.