If falling oil prices are a sign of things to come in the market for gasoline prices, then in some states where the cost of an average gallon of regular has dropped below $2.25, it is likely still falling.
The average price of a gallon of regular nationwide is $2.59, down from $2.76 a month ago. Over the same period, the price of crude oil has fallen from $55 to under $44. While state taxes and transportation costs are contributors, price of oil is the primary driver of gas prices.
The price of gas has dropped to $2.22 in Alabama, $2.24 in Mississippi and $2.20 in South Carolina, according to the AAA Fuel Gauge. Arkansas, Texas and Louisiana should join the group below $2.25 soon.
These states do have the two other advantages for low gas prices. First, all are near refineries or have large refineries inside their borders. Also, the American Petroleum Institute (API) analysis of gas taxes and fees by state, called the State Motor Fuel Tax Report, shows that all three states with prices under $2.25 have among the lowest in the country. All are below $0.40 per gallon. The same holds true in Arkansas, Louisiana and Texas.
However, the last time gas prices were below $2 in a number of states, the price of oil was below $50. Recently, gas prices reached a one-year low. If recent history is any guide, the price of gas nationwide will move to $2.25, and a number of states will drop to prices much lower. As Yogi Berra once said, “It’s deja vu all over again.”
ALSO READ: The Most (and Least) Expensive States to Drive
API methodology: The State Motor Fuel Tax Report is posted on the Web for informational purposes only. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in information contained in this report. Accordingly, the information in this report is provided with the understanding that it should not be relied on as the current laws of the state.
AAA methodology: The AAA Daily Fuel Gauge Report is a public service of the United States of America’s largest motoring and leisure travel membership organization and is updated daily by Oil Price Information Service (OPIS) with average national, state and local prices for gasoline, diesel and E-85. Every day up to 120,000 stations are surveyed in cooperation with WEX for unmatched statistical reliability.
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