US gasoline prices continue unabated fall to lowest levels in 4 ½ years

29 Dec 2008

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Santa seems to have given at least some cheer to the holiday season, with Christmas travellers now shelling out the least in four and a half years for a gallon of petrol across the US. For over a week now, gasoline prices at the pump across the US have been dropping, falling below the $1.65 per gallon mark, reports said citing a national survey of credit card swipes at gasoline stations.

The US nationwide average price dropped to $1.648 per gallon, down 0.7 cents from $1.655 on Wednesday, the American Automobile Association said, which collated information based on credit card swipes from around 100,000 service stations across the US. The AAA said that gasoline prices were not at their lowest national average since 20 February, 2004.

Even though gasoline prices have dropped almost $2.50 since their record highs from this summer's oil spike that saw crude prices at an unthinkable $147 per barrel, motor travel in the US has continued to fall. A report by the US department of transportation said that Americans drove 100 billion fewer miles year on year for the period between November 2007 and October 2008 as against the previous year. With the recession deepening, demand for fuel has been impacted, causing oil prices to drop almost 76 per cent from the highs of July 2008.

Consequently, gasoline prices at the pump have also plummeted by almost 60 per cent since their record-high of $4.114 on 17 July. The average price of gasoline, or petrol, is now below $2 per gallon in all 48 contiguous states, with Utah retailing gasoline at an average $1.463 per gallon, just below Missouri which has the cheapest gasoline at $1.44 per gallon. Alaska still has the highest price for gasoline at $2.591 per gallon, followed by Hawaii at $2.37. The average price for regular unleaded in Delaware last week was $1.56 a gallon, against $1.62 two weeks ago and $2.95 a year ago.

In a press release, Catherine Rossi of AAA mid-Atlantic said that the new year is starting with gas prices at their lowest in almost five years, on account of a sharp decline in demand. "We are entering the slowest time of year for fuel consumption, so AAA expects that lower demand in combination with current oil prices will bring down prices at the pump even further," she said.

Since July 2008, the national demand in the US has dropped from 9.4 million barrels a day to 8.8 million barrels a day, according to the Federal Energy Information Administration, which has caused refineries to reduce output and trim inventories during the colder months. That, in turn, should result in even lower lower per-gallon costs in the early part of the year, the AAA said.

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