Travel News

Gas Prices Drop, Drivers Sigh in Relief

Locations in this article:  Los Angeles, CA Santa Barbara, CA

pay at the pumpMotorists are no doubt breathing a sigh of relief this week with the news that gasoline prices have finally declined to the levels comparable to August 2007—the month that marked the beginning of skyrocketing prices that peaked in July 2008.

According to the AAA Daily Fuel Gauge Report, the average price of a gallon of self-serve gasoline nationwide plunged to $2.94 this week, nearly 30 percent less than July’s peak price of $4.11 per gallon.

The decline comes on the heels of a corresponding drop in crude oil prices, from $147 a barrel to under $70 in the last four months.

Not all states are enjoying the decline equally, however.

Oklahoma has the cheapest gas nationwide, with a gallon costing on average $2.48, but the same gallon in Alaska costs $3.88.

In California, the state with some of the highest gas taxes, gas prices are still 21 cents higher than last year’s low, while the rest of country is averaging nine cents above the previous low.

The sharp decline in oil prices, which is partly the result of the weak economy and partly due to declining demand, has worried OPEC officials.

The cartel is considering a supply cut to stabilize prices, and to correct a supposed 2 million-barrel-a-day oversupply.

Financial experts say that many motorists have made semi-permanent changes that may impact demand for oil in the long-term, such as switching from personal cars to public transportation.

Links: Los Angeles Times, CNN

By Karen Elowitt for PeterGreenberg.com.

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