AASHTO News, 23 December 2015
US Average Retail Price for Gasoline Falls Below $2 for First Time Since 2009
Analysts had predicted it could happen, but now it’s come true: The national average pump price for gasoline slid below $2 a gallon in the week before Christmas and was at its lowest level since the 2008-09 recession.
The AAA motor club, which surveys fueling stations daily, said the average retail price was right at $2 on Dec. 20, then fell to $1.998 on Dec. 21. That was the first time since March 25, 2009, that it was below $2 a gallon, according to AAA.“Drivers across the country are celebrating the historic return of cheaper gas prices,” said AAA President Marshall Doney. “The lowest gas prices in nearly seven years are a holiday gift that few consumers could have imagined when gasoline was $4 a gallon.”
AAA said it estimates cheaper gasoline prices saved U.S. drivers more than $115 billion so far in 2015, or more than $550 per licensed driver.
It also said more than two-thirds of U.S. fueling stations already are selling gas under $2 per gallon, and at least one station in each of 47 states is selling it below that level. The most common gas price nationwide on Dec. 21 was $1.899 per gallon, AAA said, about 41 cents less than at the same point in 2014.
The motor club said the falling motor fuel price comes “because there is more than enough oil and gasoline supplies around the world to meet current demand.” In addition, gas prices generally fall through early winter because people drive less during that period.
“The best news of all is that there is room for prices to drop even more in the coming weeks,” said Doney.
AAA said that based on normal seasonal trends, gas prices will probably remain low through January, and could drop even further if the cost of crude oil remains weak. U.S. supplies of commercial crude oil are about 29 percent higher than a year ago, it noted, while oil prices are about $70 per barrel lower than in the summer of 2014.
However, it said that by late winter “gas prices may rise 50 cents per gallon or more as refineries conduct maintenance in advance of the busy summer driving season. The maintenance reduces fuel production and typically leads to higher gas prices.”
Even so, AAA said, the national average price in 2017 may not rise above $3 “because oil should remain abundant and relatively inexpensive.”