Only Two States Remain Above $3 Per Gallon

Thanks to the extended decline in the price of gasoline, there are now only two states, North Dakota ($3.05) and Hawaii ($3.34), that have a state-wide average gas price above $3 per gallon. New Jersey is reporting the country’s lowest state-wide average gas price at roughly $2.50 per gallon.

According to GasBuddy.com, the national average price for a gallon of regular unleaded gasoline has fallen to $2.74, which is about ten cents lower than where we were exactly one year ago, and about 16 cents lower than what we were paying a month ago.

It seems that there are several factors at play right now regarding “how low” our gas prices are. I know that low is a relative term, but in comparison to how much we were paying back in April and May, today’s prices are pretty low.

First, there’s the obvious reason that as the summer begins to wind down, our gas prices begin to fall. Many areas throughout the country have already started school, so many families are doing a lot less traveling and demanding less gasoline.

Second, the hurricane season thus far has been pretty calm. The storms that have hit have missed the oil rigs in the Gulf of Mexico and have yet to affect the many refineries throughout the Gulf Coast region. Hopefully this will continue!

Finally, the price of oil and gasoline has been tempered by the fear that the American economy is beginning to slow down due to a dramatic fall in home prices and overall credit problems. If the American economy were to slow down to the point of slipping into a recession, the demand for oil and gasoline would be substantially less.

Barring any major hurricane or other refinery problems, we should expect gasoline prices to continue to fall, especially as most regions throughout the country begin to phase out the more expensive to produce “summer blend” gasoline.