Retail prices of gasoline in US drop below $2 per gallon

22 November 2008

The price of regular gasoline at the retail outlets in the US dropped below $2 a gallon for the first time in over three years, driven down by the changed habits of the cash-strapped consumers in the wake of a slumping economy and rising unemployment.

Petrol, better known as gasoline in the US, dropped 3.1 cents to $1.989 a gallon, according to American Automobile Association (AAA). Gasoline prices have fallen 52 per cent since their record high of $4.114 per gallon in July 2008.

According to the Federal highway administration, motorists drove less in September for the eleventh consecutive month.

The national average gasoline price dropped to $2.02 per regular gallon, AAA said, and, in 23 states, gasoline is reported to be retailing at less than $2 a gallon, while it is down to $1.72 a gallon in Missouri.

Analysts were reported as saying that the super spike in the price of oil this summer has made people change their behaviour, and it is unlikely that they will adopt their previous driving habits once again, just because the price of gas is now lower.

Though demand is lower than a year ago, the pace of decline has slowed with the prices at the pump falling. Bloomberg reported that the US consumption of gasoline dropped 2.8 per cent last week, marking the smallest decrease in 11 weeks according to a MasterCard report.