Projected Gas Prices Not as Low as Initially Forecast — They’re Lower

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CARS.COM — Gas for less than $2 a gallon is now the norm instead of the exception as the price of oil continues to get clobbered on the global market and motorists benefit from the lowest pump prices in nearly seven years. The AAA Daily Fuel Gauge Report on Thursday listed 39 states where the average price for regular gas was under two bucks.

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Though average prices were still above that threshold in New York and Pennsylvania — both states with high gasoline taxes — it was still easy to find gas for less than $2 a gallon outside of major metro areas. The average price for regular was $2.04 in Pennsylvania, which has the highest state gas taxes in the nation at 50.4 cents a gallon.

In the Great Lakes area, where gas prices tend to be more volatile than in other parts of the country, motorists saw double-digit declines the past week. Average prices fell by 10 cents in Wisconsin, 13 cents in Illinois, 16 cents in Michigan and Ohio, and 17 cents in Indiana. The average for regular gas fell 10 cents in Oklahoma to $1.57, the lowest in the U.S.; Missouri was close behind at $1.59, followed by Indiana, $1.61, and Ohio, $1.62. (Prices fluctuate throughout the day and could change.)

In California, currently the most expensive state for gas, the statewide average for regular fell 10 cents to $2.72 a gallon. Hawaii, at $2.63, was the only other state averaging more than $2.50.

Elsewhere motorists were paying prices they hadn’t seen in years. GasBuddy.com listed stations in Kansas and Missouri that were selling gas for as little as $1.43 a gallon. In Texas, prices were as low as $1.41 and in Oklahoma as low as $1.39.

The national average for premium gas was down to $2.38, according to AAA. Diesel fuel fell another 6 cents the past week to $2.12 as prices continued to defy normal seasonal patterns. Diesel prices typically increase during the winter, but the average price Thursday was 76 cents cheaper than a year ago. In comparison, regular gas is 19 cents cheaper and premium 8 cents cheaper.

U.S. oil was trading at around $28 a barrel on Thursday, compared with a recent peak of $104 in June 2014. The prices of oil and other commodities have been sliding for several weeks because of a global oil glut and a weakening Chinese economy. AAA said consumers could experience an extended windfall at the pump if oil prices remain in a prolonged slump.

“AAA previously estimated the annual average price of gas in 2016 will be $2.25-$2.45 per gallon, although the sharp decline in oil costs since the year began has the potential to lead to even lower gas prices if global oversupply and economic concerns persist,” the organization said in a statement.

Iran has complied with an international agreement to dismantle its nuclear program, and as a result economic sanctions against it were lifted earlier this week. That will allow Iran to resume exporting oil, which analysts say could add to the global glut and drive oil prices even lower.

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Contributor Rick Popely has covered the auto industry for decades and hosts a weekly online radio show on TalkZone.com.  Email Rick

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