US Gasoline Prices Drop to Lower Levels versus Last Year

Gasoline prices are certainly not cheap. Most drivers all over the United States are spending almost $4 per gallon; and most of the gas related news in 2012 has been about the continuous increase in prices, especially during the summer season. However, the story seems to change as prices at the pump have suddenly dropped for more than two consecutive weeks to reach a point where motorists are spending less for gasoline compared to last year.

According to the recent Fuel Gauge Report of the AAA, the average price throughout the country for one gallon of regular gas was $3.49. That is lower compared to the $3.58 during the past days, $3.904 in the past weeks and almost $3.860 of last year.

For reference, this scenario of lower nationwide average prices on a year-over-year basis hasn’t been seen in nearly 3 years. This implies that gasoline prices have somehow been in a steady rise and fall since October of 2009.

Based on Consumer Reports, gasoline prices in the previous weeks have dropped in all parts of the country, which includes a one-week fall of eight cents in the Midwest. Moreover, GasBuddy said that, aside from the reduction in the national average of gasoline prices, over 33% of all states witnessed a year-on-year reduction in prices at the pump.

The fall in gasoline prices is a natural consequence of decreasing gasoline futures, as well as the continuously weak consumer gasoline demand. One major trade magazine notes that the cost of gasoline should be more affordable at present. When prices at the wholesale market fall as they have, stations must also reduce their prices. However, that is not likely to be the case most of the time.

Instead, this is the time when stations are trying to make better margins by maintaining high consumer prices. Consumers are not fully aware of that because they are glad they are paying less compared to the past weeks and years.

By: Chris Termeer