How low can they go?

Local gas prices are heading into the new year with a bang for motorists.

Coeur d'Alene's 22-cent drop in the average price in just the past week to $3.08 per gallon on Thursday is "very unusual," especially in the middle of the holidays, said Dave Carlson, AAA Idaho spokesman.

"The rapid price drop for Coeur d'Alene appears to be a local phenomenon," Carlson said, adding that declines haven't been as significant in other areas, including Post Falls, where the average was $3.19. "Some magnanimous retailers shared some holiday spirit in a tangible way.

"If wholesale prices dropped, we'd expect to see the same kinds of drops in pump prices at multiple locations."

The last time Coeur d'Alene's average was this low was the first week of March this year. This week also marks the first time since Aug. 9 that the local average is below both the Idaho average ($3.11) and the nation's ($3.25).

The prices at some local stations is $2.99 a gallon.

"I love it," county resident Bryce Jackson said of the decrease while filling up on Thursday. "I just hope something doesn't jinx it."

Something may.

Carlson said retailers may raise prices 4.5 cents as soon as New Year's Day, the day after the ethanol tax credit disappears.

"What that means is that ethanol blenders who were making 45 cents for every gallon of ethanol they blend will have to forego that profit," Carlson said. "So motorists may soon be paying a little more."

Still, Carlson said he expects prices to "hold fairly steady" for the next six weeks, barring situations in the Middle East and Europe that could change the situation in a moment's notice.

"Most recent weekly gas demand data has been down around 4.5 percent from a year ago," Carlson said. "Lower demand is seasonally driven and relative to the rest of the year, this is the time gas prices will be lowest."

He said the lower prices could reflect the need of refineries to lighten their inventories of oil, a year-end tax liability.

Meanwhile, prices on the Coeur d'Alene Indian Reservation are hovering at $2.95 per gallon this week, more comparable to Coeur d'Alene prices than the 40-cent spread earlier this month that caught not only the attention of motorists but some tax and government watchdogs due to the relatively low profit margins of selling gas.

But government and tribal officials said under the Tribe's fuel tax agreement with the state, the Tribe charges the same fuel tax rate (25 cents) on the reservation as the rest of the state.

"There is no competitive tax advantage to tribal retailers on the reservation," said Helo Hancock, a tribal spokesman. "If tribal fuel retailers have lower prices than other areas from time to time, they are simply making less profit on each gallon of gas. Since the gas stations here are farther away from the larger population bases of Coeur d'Alene and Spokane, I am sure retailers are trying to bring in as much business and volume as possible. Hence, the sometimes lower prices."

Bob Bostwick, spokesman for the Coeur d'Alene Casino, which operates a gas station, said gas is sold there for profit.

"We buy gas at the same wholesale prices as any operation," he said. "Federal and tribal taxes are imposed and collected, honoring our agreement with the state. We mark it up for retail just like anyone else. My experience tells me that we're not generally cheaper, just occasionally."

Gas price averages

Thursday week ago month ago 6 mo. ago year ago

Coeur d'Alene $3.08 $3.30 $3.49 $3.60 $2.96

Post Falls $3.19 $3.25 $3.46 $3.60 $3.05

Idaho Falls $2.94 $2.97 $3.20 $3.48 $2.71

Boise $3.09 $3.14 $3.37 $3.69 $2.93

Lewiston $3.19 $3.25 $3.47 $3.73 $3.01

Idaho $3.11 $3.18 $3.41 $3.64 $2.92

U.S. $3.25 $3.22 $3.30 $3.55 $3.06

SOURCE: AAA