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Energy

Gas Prices Drop Below $3 in Five Cities

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Published
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The move of gasoline prices to less than $3 a gallon nationwide becomes ever more likely as oil prices fall. Crude has dropped below $90 recently, and the trend continues to be downward. Gas prices in the United States have fallen at a remarkable rate, with the average cost of a gallon of regular down from $3.443 one month ago to $3.20. The usual debate about gas prices on the consumer economy has become more relevant as concerns about high gas prices have turned to optimism about dropping price effects on consumer spending, particularly ahead of the holidays.

While the average price of a gallon of gas has dropped below $3.10 in several states (Missouri, South Carolina, Oklahoma, Mississippi, Tennessee, Kansas and Arkansas), it has fallen below $3 in five cities. The extraordinary low price has two primary causes: proximity to oil refineries, particularly along the Gulf Coast, and low state gas taxes.

The price of a gallon of gasoline has dropped to $2.972 in St. Louis, according to GasBuddy. It is down to $2.981 in Kansas City, Mo.; $2.988 in Tulsa, Okla.; $2.994 in Spartanburg, S.C.; and $2.990 in Greenville, S.C.

ALSO READ: America’s 50 Best Cities to Live

The state gas tax in Missouri is the 45th highest among all states at $0.173, in Oklahoma 46th at $0.170, and in South Carolina 47th at $0.168. Since none of the cities on the list are on the Gulf Coast, gas taxes are probably the reason for the low prices.

The Wall Street Journal recently reported:

A sustained period of relatively low gasoline prices could help bolster the consumer-driven U.S. economy, which has posted wobbly growth this year. Many policy makers remain concerned about the outlook, with a disappointing August jobs report adding to jitters. By paying less at the pump, consumers could use the cash to make other purchases.

The observation may be somewhat mitigated by the September jobs report, but the median household income in the United States is not moving upward. Gasoline prices are one of the few pieces of financial leverage Americans have.

ALSO READ: Retailers Hiring the Most Employees for the Holidays

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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