Gasoline prices can be influenced by the price of oil, the location of refineries, transportation costs and state gas taxes, among other things. These elements combined have taken the price of a gallon of regular below $3 in 11 states, and based on the trajectory of prices nationwide, this could be close to 20 very soon.
The lowest average gas price among the 50 states is in Missouri – at $2.851. Other states with gas below $3 include Oklahoma, Arkansas, Texas, Kansas, New Mexico, Louisiana, South Dakota, Mississippi, South Carolina and Nebraska. Several of these are in oil rich areas and close to the huge refineries that handle shipping of refined products like gasoline and diesel fuel from the Gulf of Mexico. According to GasBuddy, in all but one of these states, prices continue to drop.
In seven states, gas prices are between $3.00 and $3.10: Minnesota, Virginia, Tennessee, New Jersey, Iowa Arizona, and Alabama. And in four of these, prices continue to fall. The states with low prices have moved inland to a greater extent, and into more populous states, which means the national price may tend to come down.
Many economists believe that low gas prices will spur consumer spending, increase stock prices and perhaps drive up the tendency to buy bigger cars. Each of these things may be so; however, it is too early to say what the net effect on the economy will be. There are too many other factors, like unemployment and wage stagnation, to tell.
It is worth looking at gas prices in some of the largest states by population, where many people continue to struggle with prices closer to five-year highs than to five-year lows. These include New York, California and Connecticut, which together have close to 20% of the U.S. population.
Gas prices are down and could well drop further. But, for average Americans, the drop may only pull them out of a financial bind. Whether it makes them feel prosperous is another matter.