Households, Truckers See Big Savings at Fuel Pumps as Prices Tumble With Oil

Source: U.S. Energy Information Administration.

In the global oil markets, per-barrel prices are plunging this autumn from heavy production levels and slowed demand, and that is rapidly bringing down retail prices of gasoline and diesel fuel.

AAA on Oct. 23 said its national average retail gas price was about $3.08 a gallon, down 26 cents from a month earlier. Economists say the price plunge can put enough money into consumers’ pockets to help lift the overall economy as households spend that extra disposable income.

Diesel’s Oct. 23 average pump price in the AAA report was $3.63, which was down more than 12 cents on the month. While diesel has not fallen as quickly, declines in that prime fuel for the nation’s cargo truck fleet will quickly ripple through the supply chain, beyond truckers who drive their own rigs and pay fuel bills directly. Most trucking companies bill fuel costs back to cargo customers and adjust fuel surcharges quickly up or down.

This is a sharp change from last spring and early summer, when motorists and truckers saw prices spike, partly as the economy rebounded after an unusually long and harsh winter.

The changes are getting a lot of attention across the country, with more news and social media accounts of people finding gas prices below $3 a gallon. And many states will see their own fuel costs decline as well for their vehicle fleets.

However, the oil price declines can also disrupt some states’ revenue outlook. Those enjoying oil production booms from modern drilling techniques could see tax or royalty receipts slide, along with older production areas where stripper wells still generate a portion of rural income.