Some Areas seeing Below $3.00 per Gallon
The cost of gasoline dropped 7.4 percent last month, the U. S. Labor Department reported on Friday. That’s the biggest drop in almost four years, government economists say. Just in time for Christmas, gasoline prices have dropped below three dollars in some towns and “at a scattering of stations” in Northern Virginia, Northwest Ohio, Central Missouri, South Dakota, southeastern Minnesota. Motorists also are seeing the Christmas miracle at some filling stations in other spots on the map including, Northern New Jersey, Chattanooga, Tennessee, Tucson, Arizona, St. Louis, Missouri, and Tampa Bay, Florida.
Consumers are beginning to see some of the lowest gas prices in six months. The last time the cost of gas fell below $3 a gallon on the state-wide level was six months ago, when the price of a gallon of gasoline fell to $2.98 across the state of South Carolina in late June.
The national average retail price of gasoline at $3.29 is still a little more expensive – a nickel or so - than it was at this time a year ago. Although prices are slowly dropping, keep in mind, it was only a month ago that motorists were paying the highest ever price at Thanksgiving.
Although today’s price is eight cents less expensive than it was a week ago, it is still three cents more expensive than it was a year ago. At this pace, the average annual price of gas for 2012 will be the most expensive on record. Our collective annual tab was $481 billion in 2011. Consumers spent $389 billion on gas purchases in 2010, and we forked out $324 billion in 2009. Back in 2008, we shelled out an all-time record amount in annual fuel costs, $448 billion.
In its weekly report, the U.S. Energy Information Administration (EIA) data showed crude stockpiles increased by 800,000 barrels to 372.61 million barrels last week, well above the upper limit of the average range for this time of year. Gasoline stockpiles rose 5 million barrels to 217.12 million barrels, which is plentiful for this time of year. Gasoline demand moved higher, but the rise was just 134,000 barrels per day (bpd) and it puts demand at a very poor December level of just 8.488-million bpd.
Pump prices have dropped more than 50 cents a gallon since September, but are still high for this time of year. “Prices are dropping, not as quickly as most of us would like but they won’t deter motorists from hitting the roadways during the holiday season,” says Tracy Noble, spokesperson for AAA Mid-Atlantic. AAA does not expect gas prices to have a major impact on travel volume, but consumers could have more money to spend on holiday shopping, dining and entertainment if prices drop through December as expected.
The Week Ahead
The vast majority of holiday travelers, 90 percent or (84.4 million), will be traveling to their year-end destinations by automobile. The year-end holiday travel period is defined as Saturday, Dec. 22 to Tuesday, Jan. 1, 2013. AAA estimates the national average price of gasoline will continue to drop through the end of the year and average about $3.20 a gallon by New Year’s Day.