Regular, Premium and Diesel Prices Fall
The good news for motorists on gas prices keeps rolling in as pump prices continue to fall and analysts predict that oil prices should remain low for the next two years. The national average for a gallon of regular unleaded fell 10 cents the past week to $2.08 on Thursday, according to the AAA Daily Fuel Gauge Report. AAA said more than half of U.S. gas stations are selling regular unleaded for less than $2 a gallon, and it looks increasingly likely that the national average could soon fall below $2 for the first time in nearly six years.
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Twenty-one states were already under that threshold, with Missouri having the lowest statewide average at $1.73. GasBuddy.com listed two stations in the St. Louis area Thursday morning that were selling regular unleaded for less than $1.50 a gallon. AAA said the national average for premium gas was down to $2.50, and this week diesel fuel slipped below $3 to a national average of $2.96 a gallon. Hawaii remained the only state to average more than $3 for regular unleaded at $3.37 per gallon. California, New York and the District of Columbia were the only others with prices over $2.50 a gallon.
Gas prices have declined for 112 straight days, the longest consecutive decline on record, and have fallen $1.26 during that 16-week span.
What goes down eventually comes up, but bond-rating agency Moody’s Investors Service said in a report Thursday that the supply of oil should continue to exceed demand through 2016 and keep a lid on crude prices.
U.S. oil prices have rebounded from six-year lows in recent days but were still trading at less than $50 per barrel Thursday. That’s less than half the 52-week high of $101.33 set on June 25, 2014.
Moody’s said it expects U.S. oil to average $52 per barrel in 2015 and $62 in 2016, levels that support AAA’s prediction that pump prices will remain below $3 a gallon this year. Oil accounts for about two-thirds of the cost of a gallon of gas.
As prices continue to fall, government officials have started talking about raising gasoline taxes at the pump to generate more money for maintaining roads and bridges. The federal gas tax of 18.4 cents per gallon has not been raised since 1993, when it increased one-10th of a cent. Since then, increasing the tax has largely been a non-starter in Washington, D.C. Now, though, members of Congress say they are open to discussing an increase, calling the gas tax a “user fee,” but Congress members caution they would want any increase to be offset by tax cuts elsewhere.
Several states also have begun considering raising their own gas taxes to fix crumbling roads because they say they can’t count on getting more money from the federal government . Some of the federal gas tax revenue is shared with states.
Cars.com photo by Evan Sears
