Gas for less than $4 a gallon returns to Southern California

"We could be seeing the start of something really big -- if we have no major new problems in the economy and if we can avoid major hurricanes," said Phil Flynn, vice president and senior market analyst for Alaron Trading Co. in Chicago. "We are really seeing a contraction when driver demand usually grows, and that is huge. With demand being so weak and supplies plentiful, it's taking a toll on prices."

In Los Angeles, Pasadena and Bell Gardens, stations lured customers at $3.99 or even less for a gallon of self-serve regular and the tantalizing prospect of long-sought relief. Similar price cuts were showing up across the state.

At times, the response was frantic. Lanes were blocked sporadically at the Speedy Fuel station on Eastern Avenue in Bell Gardens. Assistant manager Eric Salcedo said his $3.99 gas drew customers from as far away as San Bernardino County, Valencia and Escondido.

"We're getting a lot of business," he said, recalling arguments and fistfights that nearly broke out.

Jacquelene Montano, 43, took one look at the sign advertising unleaded for $3.97 at Garo Gas in Pasadena and practically stopped in her tracks: "Oh, my God, this is great!" she said. "We turned around."

Montano, a nursing assistant, said her son lived near the station on Washington Boulevard. And because she works close by -- and the station is offering gas for $3.98 a gallon over the weekend -- she said she was likely to come back again.

High pump prices have forced Montano to cut her expenses. "I don't go to the salon like before," she said.

Daisy Costante, 22, of Duarte stopped at the same station after a friend she was visiting told her about the cheap gas. Costante said she called up her parents. On Friday afternoon she pumped $35 worth into her Toyota Tacoma.

"I haven't filled up all the way in a long time," Costante said.

Gas below $4 a gallon is a traffic stopper. But at AAA, officials have seen a slow but steady drop for five straight weeks. "And by as much as a dime just in the past week," said Elaine Beno, a spokeswoman for the Automobile Club of Southern California.

The average price for regular gasoline in California and around the nation Friday remained significantly higher compared with a year ago but still reflected the biggest drop of the year.

In California, the average had fallen 23.6 cents to $4.374 from the all-time high of $4.610 on June 19, according to the AAA Fuel Gauge Report.

Nationally, the average fell to $4.006, which was 10.8 cents off the record set July 17.

Many factors account for the change, including conservation and hurricanes.

"Everything we hear anecdotally from our members suggests that more of them are riding trains and buses or carpooling or riding motorcycles or bicycles to work," said the Auto Club's Beno.

Luck helps too, said John Kilduff, vice president of risk management at the New York trading firm MF Global, noting that Hurricane Dolly this week skipped past petroleum facilities in the Gulf of Mexico. "I've never seen a hurricane do that before. Consumers really caught a break on that," he said.

According to the most recent data available, Californians burned 43.5 million fewer gallons of gasoline in March than they did during the same month in 2007.

Flynn, the Alaron analyst, said gasoline demand had fallen 2.2% nationally in the middle of the summer driving season, a time when demand normally rises 1% to 1.5% or more. The drop was reflected in the Energy Department's weekly petroleum report Thursday that showed U.S. gasoline stocks at 217.1 million barrels. That was more than 13 million barrels more than in the same week in 2007.