As oil dips below $40 a barrel, gasoline prices will hit lows for late August, lower for this time of year than at any time since 2004. And they are almost certain to move lower.
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According to the AAA Fuel Gauge Report:
Average U.S. gas prices today are at the lowest levels for this time of year since 2004 due to the steep decline in the cost of crude oil. Gas prices have dropped recently despite ongoing refinery problems, and prices should continue to fall this autumn due to declining demand and the switch over to winter-blend gasoline. Today’s national average price of gas is $2.59 per gallon, which is eight cents less than a week ago and 84 cents less than a year ago. Pump prices are now 21 cents per gallon below the 2015 peak price reached on June 15.
However, the improvement is not universal and is uneven:
Retail averages are down in 44 states and Washington, D.C. month-over-month. The largest discounts in the price of retail gasoline were in California (-36 cents) and New Jersey (-25 cents). Consumers in 33 states and Washington, D.C. are enjoying monthly savings of a dime or more per gallon at the pump. On the other end of the spectrum, retail averages have moved higher in six states over this same period. Prices are double-digits higher in five Midwestern states compared to one month ago: Indiana (+30 cents), Illinois (+26 cents), Michigan (+17 cents), Ohio (+16 cents), and Wisconsin (+16 cents).
The current national average for a gallon of regular gasoline is $2.58. However, as is nearly always the case, states that have large refineries, or are close to ones that do, have the lowest prices. In refinery-rich South Carolina, the average price is $2.11 and likely to breach $2 on the way down. The price in Mississippi is $2.18. In Alabama it is $2.16 and in Texas $2.21. Most of these states also have taxes and levies on gasoline that are well below the national average.
If late August prices are at a decade low, and oil continues to plunge, expect prices in September to be at multiyear lows as well.
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