The Gas Price Bonus
Compared to a year ago, Americans are saving almost $110 million dollars a day on gas prices, gasbuddy.com, a Maryland-based fuel comparison website, estimated last month.
Alabama was second only to Tennessee in the list of states that are seeing the largest yearly savings in a gallon of gas, according to AAA research. The gas price in Alabama stays considerably lower than the national average, thanks in part to the state’s proximity to refineries.
Abundant global oil production — particularly the substantial increases to U.S. production — continues to outweigh any concerns of possible supply disruptions due to geopolitical instability. This assessment has been validated by the price of crude dropping by approximately 25 percent since June at the same time as violence in Iraq and tensions in Eastern Europe have continued to grab headlines, according to AAA’s Michael Green.
But how long will the party last?
“That’s the question everyone’s asking, and we’re cautiously optimistic that the national average could fall further, perhaps by another 5 to 10 cents per gallon before year’s end. Some parts of the country, such as the Southeast, might see a greater decrease,” says Gregg Laskoski, a senior petroleum analyst with GasBuddy.
“The next OPEC meeting is November 27, and that may give us an indication of whether or not OPEC might try to curb production. If it does, that might stop the slide of oil prices,” Laskoski says.
Meanwhile, companies across Alabama are able to pocket the savings or plow them back into company improvements or deferred maintenance. “Any time we’re putting less money in gas tanks, we’ve got more in our pocket to spend on groceries, entertainment, clothing, an endless number of possibilities,” says AAA’s Clay Ingram.
Even with lower pricing, Ingram preaches that business and private consumers should do a better job of price shopping for the lowest price on every tankful. “When we do that, it puts a significant downward pressure on prices, so that we’re saving both today and in the long run.”
He expects fuel prices to head upward in the spring.