Gas Prices Fall Amid Reduced Demand

Gasoline pump prices continued to slip lower across the country, edging close to $1 a gallon in parts of the South and Midwest, because of reduced demand and lower oil prices.

At one convenience store in Reading, Pa., gasoline was selling for 95 cents a gallon, according to an informal survey by Reuters.

The U.S. average price of self-serve regular gasoline fell 4 cents in the last week to $1.309 a gallon, the Energy Information Administration said Monday. The average has dropped 22 cents a gallon since the Sept. 11 terrorist attacks, according to the weekly survey of 900 gasoline stations by the statistical arm of the Energy Department.

The California average was $1.55 and the Los Angeles average was $1.427 on Monday, both down slightly more than 3 cents in the last week, the EIA said. California’s gasoline prices usually are higher than prices in the rest of the nation because the state’s unique super-clean gasoline is produced by relatively few refineries within the state.

The slide in gasoline prices has been attributed to reduced demand since the attacks, which has allowed tight gasoline supplies to rebuild. In addition, oil prices have plummeted since Sept. 11 on fears that a recession will sharply shrink demand for petroleum products.

“People are less likely to take trips in times like this, and it’s taking a toll on demand,” said Geoff Sundstrom of AAA (formerly called the American Automobile Assn.). “This has helped rebuild national inventories.”

AAA’s daily gauge of gasoline prices pegged the average in three states--Indiana, Ohio and Oklahoma--just under $1.20 on Sunday, the most recent AAA numbers available.