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.

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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.

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