Price of Gas in U.S. Slips Under $1
Americans on average are paying less than $1 a gallon for gasoline nationwide for the first time in nearly five years, the U.S. Energy Information Administration said Monday.
Gasoline that cheap can be found in California, but on average residents here are shelling out more for their fuel: $1.137 a gallon for self-serve regular gasoline, compared with the nationwide average of 99.6 cents a gallon. Still, Californians are paying considerably less than a year ago, thanks to rock-bottom oil prices.
“It’s pretty good,” said Bob Aldrich, spokesman for the California Energy Commission. “There are stations in Sacramento where gasoline is below $1 a gallon, and I would not doubt that there are places in Los Angeles where gasoline is selling for less than $1.”
But the national price decline--based on weekly averages--may be fleeting because oil prices should begin to creep higher soon, said Energy Information Administrator Jay Hakes.
“We see prices gradually coming back,” Hakes said. “There’s not the potential for big drops in the future.”
Nationwide, gasoline has not been this inexpensive since Jan. 10, 1994, when the average price was 99.5 cents a gallon, said the EIA, the statistical arm of the Department of Energy.
In California, motorists have paid less than the current $1.137 several times this year. The state’s average price of gasoline for the week ended Monday was actually 2/10ths of a cent higher than the week before, but it was still 22.5 cents lower than a year ago.
National prices at the pump for regular unleaded gasoline fell more than 1 cent a gallon in the week ended Monday, down from $1.008 a week ago, according to the EIA’s weekly survey of 800 stations. A year ago, the average price was more than 17 cents higher.
Trilby Lundberg, who conducts her own gasoline price survey in 70 cities across the country, said gasoline is selling for less than $1 a gallon in 26 cities.
Lundberg, publisher of the Camarillo-based Lundberg Letter, said California’s prices tend to be higher because “our taxes are higher and we have our own special fuel, which is the highest-quality fuel in the world,” as mandated by clean-air regulations. The price is also more volatile here because of limited sources of supply and high levels of demand for the gasoline.
In the four-county Los Angeles region surveyed by Lundberg, self-serve unleaded gasoline averaged $1.1195 on Nov. 6, the date of her most recent survey. Los Angeles started the year at $1.2325 and hit a low of 98.01 cents a gallon March 6.
Gasoline prices have been falling because oil prices are so low. The spot-market price for benchmark West Texas Intermediate crude oil was $13.57 a barrel last week, down $7.19 from a year ago, the EIA said.
Crude oil futures for December delivery fell 75 cents to $12.82 a barrel on the New York Mercantile Exchange on Monday, hitting a three-month low, on the easing of fears of military action in the Middle East.
Crude oil makes up about 37% of the national price of a gallon of retail gasoline, including taxes. In California, crude oil accounts for about 27% of the price at the pump, and federal, state and local taxes account for about 40%.
Hakes said continued low oil prices could drive gasoline prices even lower in the short term, though the EIA estimates that prices will eventually begin to rise and average $1.02 a gallon in the fourth quarter, which would be the lowest quarterly price ever when adjusted for inflation.
Bloomberg News and Reuters were used in compiling this report.