NEWS

Economy's Silver Lining: Gas Prices Plummet

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The fall in retail gasoline prices correlates to the price paid for crude oil — it accounts for 66% of the price of a gallon of gas, according to the EIA – and crude has seen a sharp decline in value. Oil prices are dropping in response to last week’s downgrade of the U.S. credit rating by Standard & Poor’s and a poor economic outlook for the country and Europe, according to the Los Angeles Times. Crude oil prices — currently at $81 a barrel — have reached their lowest point of the past eight months. Gas prices were around $3 a gallon the last time oil prices were this low. 

Overall, gas prices are still about 89 cents higher than a year ago. The EIA says gas prices have increased over the long term because of the U.S. economy’s gradual improvement and political upheavals earlier this year in the Middle East and North Africa, which account for a third of world oil production.

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