“Hurricane Ike hit at a challenging point in time,” Buchanan said. “The distributors had smaller margins of motor gas in the transition from the summer season to the winter season. It was the perfect storm.’’

When the cost of crude oil peaked in July, gasoline prices surged to a record $3.89 a gallon on average in Missouri. The price of gasoline can shoot up immediately, but the declines come more slowly in incremental steps.

“The actual increase from Hurricane Ike was up roughly 80 cents in the last week,” Buchanan said. “The full increase was not passed on into the market, only a portion was passed on.”

“As supplies are restored, the distributors will recoup what they lost. The decline in prices will be gradual and carry forward for a number of days until they collect what was lost.’’

Buchanan said the approach is to knock the top off the spike and raise the bottom of the trough that follows so that a sense of market stability is maintained.

“Price declines will run parallel with the restoration after Ike,” he said. “Once the industry gets legs under itself, the decline will be in pennies and then more. We are stressing to people that they maintain a sense of calm and don’t be reactionary. We have adequate supplies in the system.’’

In light of the turmoil in financial markets worldwide, Buchanan noted that a decline in gasoline price does not necessarily mean “that people will spend money on gasoline after it comes down. I think they will be holding onto their dollars for the next several months because they are concerned about everyday expense. That could further reduce demand and lower prices.’’

Demand dip

The high cost of gasoline reduced demand for gasoline by about 4 percent nationwide when compared with demand a year ago, according to analysts. The decrease in Missouri was about 2 to 3 percent.