I first noticed a significant drop in the price around the period just before the 4th of July weekend this year, from about $2.63 a gallon, to $2.47 a gallon. Then, for the next sixty days, up until September 4, 2005, gasoline prices rose an average of one cent a day, or 60 cents for that period, from $2.47 to $3.07. I have been keeping track of the price shifts on my recurring post entitled "Take A Bus, It's Cheaper."
In late September, I read a headline entitled "U.S. Retail Gas Prices Drop 20 Cents," which caught my eye. According to the article, the claim was that price had dropped an average of 20 cents, to $2.84 a gallon. I didn’t pay much attention to the article at the time, but bookmarked it for future reference. The price drop did not reflect what I was seeing in my area, but I was not going to conclude that it did not apply elsewhere.
And then I read today, under the headline entitled "Average U.S. Gas Prices Drop 25 Cents," that the price had dropped an average of 25 cents in the past two weeks, to $2.69 a gallon. That would indicate that the price of gasoline has dropped around 45 cents over the past two months, and that simply is just not true. On its face, if you simply subtract $2.69 from $2.84, that’s only 15 cents, and the article does not specify that the price of gasoline increased by 10 cents a gallon first, in order for it to have dropped 25 cents.
In fact, my little survey shows there has been no significant shift, in either direction, with the price of gasoline at a steady $3.07 for nearly two months, give or take a drop of 2 cents here, and increase of 4 cents here, back down 2 cents, etc.
The time period referenced in the Lundberg Survey, Inc.’s press release on September 25, 2005, where the alleged drop of 20 cents occurred, is from September 10 - September 23. By my tracking of gasoline prices in Los Angeles that for that same period show that the price stayed pretty much the same until Hurricane Rita hit, and then the price dropped 2 cents, from $3.07 a gallon to $3.05. The price dropped again on the September 26, 2005 to $2.99, but went right back up to $3.03 on September 30, 2005, and up again to $3.07 by October 5, 2005, the same price it was the entire month of September. Clearly not a 20 cent drop. More like it stayed in place.
The time period referenced in the Lundberg Survey, Inc.’s press release on October 24, 2005, where the alleged drop of 25 cents occurred, is from October 6 - October 20. Again, by my tracking of gasoline prices in Los Angeles for that same period show that the price went down 2 cents on October 10, and another 6 cents on October 14. That’s 8 cents anyway you count it, and clearly not 25 cents.
I went to their website, to see if I could figure out how they came to this conclusion, and I found the following:
Q. How does LSI obtain the survey data and information?
A. By primary research of oil industry sources. Some data are gathered on-site in the field, while others are established by telephone.
When you read the articles, as put out on AP services, you, at first, get the impression the prices are dropping, even if the prices in your area do not exactly reflect that fact. If I wasn’t tracking the prices since July, 2005, I too, would have thought that the prices were dropping. As I noted above, the prices went up a full 60 cents from July 4, 2005 through September 4, 2005, and have hovered at that 60 cents increase, dropping only a few cents at a time before going right back up. The price of gasoline has not dropped 20 cents in September 2005, and it has not dropped an addition 25 cents in October 2005. The reports put out by LSI are misleading, by a long shot.
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