Gas Prices Drop Below $1.60 in Some Places

By Douglas A. McIntyre Updated Jan 13, 4:10PM EST · Published Dec 12, 9:30AM EST

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Gas Prices Drop Below $1.60 in Some Places — © Thinkstock

The national average price for a gallon of regular gasoline has fallen to $2.01, as oil prices have plunged below $36. The ripple effect already has begun to show as gas prices have dropped below $1.60 in some parts of the country

All the cheap-gas cities, small towns and counties are in states where prices are well below the national average. Almost all of these are close to refineries, in states with low fuel taxes or both. Texas, Louisiana, Alabama, Mississippi, Missouri and South Carolina are among these. Gas prices in most of these are below $1.80 a gallon.

According to GasBuddy, there are a number of areas where gas prices are below $1.60. In Belton, Mo., the least expensive gas price is $1.57. In Calhoun County, Texas, gas is well under $1.60 in some stations. Areas with gas prices this low are littered across the GasBuddy gas price map of the United States.

Much of the “new normal” of gas prices relies on a very few factors. Prices are driven primarily by just four factors: oil prices, proximity to refineries, refinery capacity and state taxes and levies. The recent decision by Saudi Arabia to continue to keep its oil exports high has almost dissolved the OPEC cartel. This guarantees oversupply of crude.
[nativounit]
Slowing national economies in the largest countries, including China, will lower demand. The cost of producing oil from shale deposits is greater in some cases than what it can be sold for; nonetheless, parts of this industry continue pumping, increasing supply.

Several states house large refineries or are close to those that do. This is particularly the case near the Gulf of Mexico, and the massive refinery operations south of Houston. Some owned by Exxon Mobil Corp. (NYSE: XOM) pump several hundreds of thousands of barrels per day.

Gas prices in several states are low in large part because of the level of state and federal taxes and levies. The American Petroleum Institute’s October state fuel tax report put the national average at $0.4869 per gallon. However, in South Carolina, a state with extremely low gas prices, that figure is $0.3515. In the Gulf Coast states, the tax level is $0.3719 in Mississippi, $0.3840 in Texas and $0.3841 in Louisiana.

Gasoline prices of $1.60 per gallon will only spread.

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.