Gas Pump Prices Driven Below $1, Lowest in 4 Years

U.S. retail gasoline prices fell more than a penny a gallon last week to their lowest level in more than four years, the Department of Energy said.

Continued weakness in the crude oil market has driven gasoline prices to less than a dollar a gallon on average, the lowest weekly level since Jan. 10, 1994.

Prices at the pump for regular unleaded gasoline averaged 99.6 cents a gallon for the week ended Monday, down from $1.008 a week ago, the department’s Energy Information Administration said. Prices are more than 17 cents a gallon lower than in the same week last year.

The drop is only temporary, said EIA Administrator Jay Hakes, who said he expects oil prices, and gasoline prices, to rise again.

“We see prices gradually coming back,” he said. “There’s not the potential for big drops in the future.”

The drop was the largest since January, and it follows a continued slump in crude prices, which have fallen more than 20% since Sept. 30.

Crude oil futures for December delivery fell 75 cents to $12.82 on the New York Mercantile Exchange on Monday. Gasoline futures for December delivery also dropped, falling 1.48 cents to 39.57 cents a gallon.

Crude oil makes up about 37% of the cost of an average gallon of retail gasoline, including taxes. Without taxes, oil constitutes 52% of the cost, according to the Petroleum Research Foundation.

Hakes said continued low oil prices could drive gasoline prices even lower in the short term, though the EIA estimates that the price of gasoline will eventually begin to rise and will average $1.02 a gallon in the fourth quarter.