Gas Prices Continue to Fall, At Lowest Level in Nearly Two Months

Thanks to decreased demand and falling oil prices, the national average price of gasoline has fallen each of the last 13 days, and is now at levels not seen since the end of May.

Since hitting its record high of $4.12 per gallon on July 15, the price of gasoline has fallen 19 cents – over 4% – and now stands at $3.93, a price not seen since May 29.

According to Gasbuddy.com, Hawaii is reporting the highest state-wide average price at $4.55 per gallon, while Oklahoma is reporting the lowest state-wide average price at $3.62 per gallon. Eleven states and Washington, D.C. are reporting an average price above $4 per gallon.

Much of the decline in gasoline prices can be directly attributed to the fact that Americans have started adjusting their driving habits in order to compensate for having to pay more at the pump. For example, according to Federal Highway Administration, Americans drove 9.6 billion fewer miles in May 2008 than in May 2007.

According to an article written by Kenneth Musante and Aaron Smith published on CNN.com (see the above link), Americans have traveled nearly 41 billion less miles in 2008 than at the same point in 2007.

Assuming the average vehicle gets about 20 miles per gallon, Americans have used over two billion less gallons of gasoline so far this year.

Additionally, the reduction in miles and corresponding decrease in gasoline consumption doesn’t take into account the fact that many Americans are still driving the same amount, but have traded in less fuel efficient vehiclese such as trucks and SUVs for cars with better fuel economy such as compact cars and hybrids.

Hopefully even if gas prices continue to fall, we’ll continue to be mindful of the amount of miles we drive and continue to move towards more fuel efficient vehicles.