It's Official: National Average Gas Prices Fall Below $2
CARS.COM — U.S. motorists are receiving a holiday bonus at the pump: The national average for regular gas has dropped below $2 for the first time since late-March 2009. GasBuddy.com reported that the price for a gallon of regular gas slipped below $2 on Saturday, and the AAA Daily Fuel Gauge Report confirmed the milestone on Monday.
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AAA said the national average for regular was $1.998 early Monday, and GasBuddy had it at $1.995 by late morning; prices fluctuate throughout the day and could change. GasBuddy and AAA said more than two-thirds of gas stations across the country were selling a gallon of regular for less than $2 and that motorists could find at least one station in each of 47 states with pump prices below $2. The only states without $2 gas were Hawaii, California and Nevada.
“The lowest gas prices in nearly seven years are a holiday gift that few consumers could have imagined when gasoline was $4 a gallon,” Marshall Doney CQ, AAA’s president and CEO said in a statement.
The national average for regular topped $4 in summer 2008, peaking at $4.11 in July of that year before the economic recession reduced demand for gas.
“We have witnessed a dramatic shift in gas prices that has saved families hundreds of dollars so far this year. The best news of all is that there is room for prices to drop even more in the coming weeks,” Doney said.
GasBuddy senior analyst Patrick DeHaan concurred but cautioned that sub-$2 gas won’t be permanent, despite a glut of oil that has pushed global oil prices to seven-year lows.
“It’s likely that gasoline prices will decline even further into early January as demand bottoms out, but eventually the party comes to an end,” DeHaan stated.
Demand for gas will climb in the spring, plus refineries will shift from winter-blend gasoline to more expensive summer blends, and refinery maintenance will temporarily reduce production just as demand rises. In addition, the Federal Highway Administration estimates that Americans will drive a record number of miles this year.
“Like clockwork, first-quarter retail prices tend to climb rapidly as this annual exercise tightens supply and consumer demand concurrently rises, but before that happens we might see the national average bottom out at $1.85,” DeHaan said.
In the meantime motorists are saving at the pump compared with recent holiday seasons. A year ago the national average for regular was 41 cents higher, according to AAA. Two years ago gas was more than $1.20 higher.
AAA listed Missouri as having the lowest statewide average at $1.77 for regular, with Oklahoma and South Carolina a penny higher. Hawaii, at $2.73, and California, at $2.72, were the only states over $2.50. Nevada was third-highest at $2.49.
The national average for premium was at $2.50 a gallon on Monday, and diesel was at $2.36. Diesel prices typically rise during the winter because some of the heavier oil used to make diesel is diverted to home heating oil. Unusually warm temperatures have reduced demand for heating oil, and diesel prices have declined along with gas. Diesel is 51 cents cheaper than a year ago and about $1 cheaper than two years ago. GasBuddy said that Kansas City, Mo., had the lowest average price for regular among cities at $1.67, and stations in Independence, Mo., were selling gas for as little as $1.50.
