HARLINGEN, Texas — As you drive across the valley you will notice fewer cars on the roadways. You will also notice low gas prices.
The COVID-19 pandemic has more drivers sheltering in place, driving the price of gas down.
Local economist, Teo Sepulveda, with South Texas College says while the drop in price is good for drivers, it may not be good for the overall economy.
“Lower gas prices help out, but they are just going to compensate a little bit from the big drop in revenues that almost everyone is getting because we’re naturally doing less business because of the distancing,” says Sepulveda.
We asked Sepulveda why gas prices vary from store to store and he says with less gas purchases the market has become less liquid, meaning stores can’t figure out what price to set.
“It takes longer for competitors to figure it out since there are such a low amount of purchases, it takes longer for seller what the proper price to set,” says Sepulveda
Texas Comptroller Glenn Hegar says Texas may be headed for a recession.
The effects of the economic slowdown and oil slump are already being reflected in the state’s massive unemployment numbers.
Sepulveda says drivers can expect the oil industry to fall into a deep slump over the next few months, before rebounding and experiencing another boom as the economy recovers.
He also expects prices to remain low for drivers for the next 10-12 months.