Gas Prices Drop Below $2 in 5 States

The price of gas has dropped to $1.90 in South Carolina, $.1.93 in Mississippi, $1.94 in Alabama and $1.99 in Tennessee. The price of a gallon of regular is just above $2 in New Jersey, Arkansas, Virginia, Texas, and Oklahoma.

Most of these states have a large amount of refinery capacity within their borders, or in states close to them. Oklahoma, Alabama, Mississippi are all a short distance from the refineries of the Gulf, southeast of Houston. South Carolina has large refinery capacity of its own.

Gas Buddy analysts confirm that the fall will bring additional drops in prices. On September 8, they wrote

With the summer driving season now in the rear view, gasoline prices are likely to continue moving lower as demand tapers off and strict gasoline requirements are eased in the weeks ahead. Oil prices continue to be volatile, but GasBuddy still expects prices to eventually move lower in the weeks and months ahead due to the aforementioned factors.

The national average fell nearly seven cents per gallon in the last week to $2.391/gallon this morning, the lowest since mid-April, led by big drops in Midwest states, where pump prices slide following BP’s restart of its Indiana refinery two weeks ago. 48 of 50 states saw declines, led by Indiana falling 17 cents, Ohio 16 cents, Illinois 14 cents, Missouri 13 cents and Michigan 13 cents. Only Delaware and Utah saw increases of 4 cents and a penny, respectively.

Another critical part of low gas prices is the taxes and levies individual states place on gas. According to the July report on these charges, the API data show that New Jersey, South Carolina, Oklahoma, and Mississippi all have taxes and levies well below the national average of $.489. Most of the states with low gas prices have levies and taxes below $.40. Policy is almost as important as oil prices and refinery proximity in many states.

Crude has plunged recently to $45. Goldman Sachs recently forecast the price will fall below $30. If so, gas prices will move toward $1.50 a gallon in many of these states.