Declining Gas Prices Pump Up A Shaky Economy
In recent weeks, economists have been worrying about the negative impact of the now-ended government shutdown and potential debt crisis.
But away from Capitol Hill, the economy has been getting a big boost: Gasoline prices have been declining, week after week. In some parts of the country, a gallon of unleaded regular gasoline is now down to less than $3 a gallon — a price most Americans haven't seen in three years.
And any time the pump price starts dropping, consumer spirits start rising.
"When it falls, everyone has a smile on their face, and when it goes up, nobody is happy," said Mike Thornbrugh, spokesman for QuikTrip, a Tulsa, Okla.-based company that operates nearly 700 gas stations nationwide. Dozens of them are located in the Tulsa area, where many stations sell gas for around $2.99 a gallon, thanks to low fuel taxes and nearby refineries.
Chuck Mai, spokesman for the AAA auto club in Oklahoma, says the lowering of geopolitical tensions involving Iran, Syria, Egypt and other places in the Middle East has helped cut prices.
"Tensions seem to have cooled there," Mai said. "And no hurricanes threatening the Gulf [of Mexico], so everything looks good for continued lower prices."
Mai's assessment is shared by most economists, who are predicting prices will be heading even lower over the next several months. Analysts point to a number of triggers that shot down gas prices, allowing the average price of a gallon to slide from $3.74 in March to $3.37 a gallon this week.
Among the reasons most often cited are:
Despite all of those positive factors, Patrick DeHaan, a senior petroleum analyst for Gasbuddy.com, warns that consumers should not get too used to low gas prices. He says most of this autumn's bargains reflect simple good luck with the weather.
"We have not seen a hurricane this year, so we have not had to deal with that," DeHaan said. "We're past the peak season [for hurricanes], so we may be able to get out of this year without any major disruptions" in oil drilling or refining.
Prices likely will start to rise again next year when the blossoms open, and the storm season starts to heat up again. "Unfortunately, we can expect prices to go back up in the spring," he said.
Matt Trotter of Public Radio Tulsa contributed to this report.
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