Gas Price Drop Steepens Ahead of Memorial Day

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With the Memorial Day weekend just days away, it is clear that the gasoline price increase that often accompanies summer driving will not do so this year. The drop in gas prices is accelerating nationwide, and is dropping even more rapidly in some of the most expensive markets.

The AAA Fuel Gauge put yesterday’s price for the average gallon of regular nationwide at $3.646. That is off from $3.663 a month ago, which was near the year’s high-water mark.

Reviewing the numbers, AAA experts remarked:

The national average price of gas likely is at or very near its peak for this spring, and AAA expects prices to remain less expensive than last year’s high of $3.79 per gallon. AAA predicts that gas prices should decline in advance of the summer driving season as the refinery maintenance season ends and gasoline production increases.

While gas prices remain closely married to oil prices, factors of refinery capacity and transportation costs often figure nearly as much. For example, the fact that Texas has more large refineries than any other state helps keeps gasoline prices there very low.

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Many of the most populous states are where prices are the highest, so a relatively large portion of the population, concentrated in a small portion of the U.S. geographically, bears a significant portion of the brunt of high prices. The price of a gallon of regular bought in California yesterday was $4.19. Gas prices remain above $3.80 in several other states that include a substantial parts of America’s population — Connecticut, New York and Illinois.

However, the trend in most states appears very like the national one:

Drivers in 43 states and the District of Columbia saw the price at the pump drop over the past week, including five states where prices fell by at least a nickel: Kansas, Illinois and Nebraska (-5 cents), California (-6 cents) and Delaware (-7 cents). Among those seven states where prices increased only drivers in Ohio and Indiana are paying a nickel more and these two states have also posted two-week declines of 5 and 7-cent respectively. This is consistent with the trend in recent years where pump prices in the Midwest have often been among the most volatile in the country due to refinery issues, supply bottlenecks and logistical issues.

While the relationship between high gas prices and the overall consumer economy continues to be debated, it can hardly be disputed that falling gas prices area a positive trend as Americans move into the summer.

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