As another indication of how fast gasoline prices have fallen, they have dropped below $2.60 in five states, based on the price of an average gallon of regular. The national price is $2.81 according to Gas Buddy.  Based on the opinion of a large number of experts, the U.S. economy should benefit from the move, particularly as consumers have more money to spend for the holiday season

The drop could continue and might accelerate if the recent past is any indication. The price of an average gallon of regular was $3.28 nationally a year ago.

The states where gas prices are below $2.60 include Missouri at $2.55, South Carolina at $2.56, Mississippi at $2.57, Texas at $2.59, and Tennessee at $2.59. Two of these states sit on the Gulf of Mexico, close to the huge refineries in Houston. Tennessee borders Mississippi. This helps drive down prices because one of the largest contributions to gas prices is transportation.

Consumers in these states enjoy low gas rates in part because of low gas taxes, according to the Tax Foundation’s figures for 2013. Missouri is 45th in level of gas tax at $.173, South Carolina ranks 47th at $.168, Mississippi is 44th at $.188, Texas ranks 38th at $.20, and Tennessee 36th at $.214. By contrast, New York which ranks first, has a gas tax of $506 a gallon.

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Oil prices, the largest component of gas prices continue to fall. At $74, they dropped  from nearly $100 in late June. And some experts expect them to drop much further. According to a recent story from Reuters:

Some commodity fund managers believe oil prices could slide to $60 per barrel if OPEC does not agree a significant output cut when it meets in Vienna this week.

And,

If OPEC fails to agree a cut, prices will drop “further and quite quickly”, with U.S. crude CLc1 possibly sliding to $60, Doug King, chief investment officer of RCMA Capital, said.

Economists searching for reasons that fourth quarter GDP will be strong, need look no further than gas prices to find one among them

 

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