Written by Jon Mercer in Automotive
Viewed by 50 readers since 12-25-2008

This week the price for a gallon of gas in the United States fell to a low not seen in this country since February 2004. In fact, prices fell a full five-percent from just one week ago. The national average price for self-serve regular unleaded gasoline was down to approximately $1.66 a gallon on December 19. This price is 9.04 cents less (on average) than only two weeks earlier. A nationwide Lundberg survey of 5,000 gas stations in major metropolitan areas confirmed the price drop this week.

This price is now less than half of the nationwide average in July, when consumers were paying approximately $4.11 a gallon for regular unleaded gasoline. That’s also $1.31 less per gallon than consumers were paying one year ago. Hopefully, the US economy will get a boost from the drastic drop in gas prices, but the higher prices over the past year have hurt demand and have affected the profitability of both producers and retailers.

Retail margins reached the highest levels ever in 2008, with an annual average of fifteen cents on the gallon. The drop in crude oil prices fell in tandem with the retail margins, which provided a much needed break to consumers who were already hurting because of the economic downslide in recent months. A barrel of U.S. crude oil hit $147 in July, the highest level ever. This week crude oil fell to $33.87 a barrel on the New York Stock Exchange.

In the United States, about fifteen percent of refinery capacity is currently not in operation. Some refiners are also undergoing maintenance to prepare for spring, when oil consumption tends to be at its highest. At $2.41 a gallon, Anchorage, Alaska, had the highest price for self-serve regular unleaded gasoline. Cheyenne, Wyoming had the lowest price at $1.37 a gallon.

With the exception of Alaska and Hawaii, whose prices for gasoline are on average quite a bit higher than the “lower 48,” Long Island, New York had the highest price for self-serve regular unleaded gasoline at $1.92 a gallon. Although falling gas prices may help give our economy a slight boost, it may not be enough to actually reverse the affects of the highest prices in history earlier this year, which helped send the economy into a tailspin. The number of jobs lost due to the higher oil prices earlier this year has not been officially revealed, though many experts say it was in the hundreds of thousands.