Gas prices tumble below $2 mark
KINGMAN - It seemed impossible four months ago, but today, it's finally happened. Local gas prices are below $2 a gallon.
Well, almost, anyway. While prices as low as $1.92 a gallon can be found at certain locations in town, according to AAA's Fuel Price Finder, Kingman's current average for a gallon of regular unleaded stands at $2.021 thanks to a few outlying stations still stuck in the $2.20 range.
Prices at both the state and national level have fallen dramatically from the peak they reached in early July. Arizona's current average of $2.057 per gallon is fully $2 less than the $4.09 motorists were paying on July 3, though it remains slightly above the current national average - a mere $1.908.
According to Michelle Donati, a public affairs specialist for AAA Arizona, gas prices are the lowest they've been in more than two and a half years.
"It was in early March of 2005," Donati said. "We went from being $2.048 to $2.078 (from March 8 to 9)."
Donati said since the nationwide financial crisis entered high gear with the collapse or sale of several large banks and investment firms in mid-September, gas prices have been falling at a record pace.
Last week alone, the statewide average dropped nearly 20 cents - the second-largest drop the association has recorded since it began regularly monitoring gas prices in 1991.
"Last week it was 19.9 cents," Donati said. "The week before that was a 16-cent drop. The week before that, which was right after the election, was a 19.6-cent drop."
And the week prior to that, Donati said, was the biggest decline ever, with prices falling 22.1 cents in the seven days preceding Oct. 31.
Donati said the steep drop in the price of gas is the direct result of several factors. The first is the similarly steep drop in the price of crude oil over the same period - nearly $100 over the last 20 weeks.
"Crude's trading at $51 per barrel, and last week we saw it actually fall below $50 for a few days," she said. "That's a pretty substantial drop from the $147 per barrel we experienced in July."
Prices also have been dropping due to a sharp decline in the number of motorists taking to the road. While oil and gas consumption typically go up each year, Donati noted that statewide consumption has fallen dramatically, partly due to previously high prices, and partly due to the subsequent economic downturn.
"For September of '06 to '07, there was just over a 2-percent growth in consumption for Arizona - it was 2.3 percent, actually," she said. "Now, when you look at consumption figured for 2008 for September, (it's) lower than both 2006 and 2007."
In fact, gasoline consumption was down 2.4 percent from 2006 levels, and nearly double that from 2007. And while week-over-week consumption has begun to rise again, Donati said 2008 consumption likely would remain a net decrease from last year's.
"We have seen consumption pick up slightly when you look at week-over-week, but when you look at year-over-year figures, consumption is still below last year's figures," she said. "Prices have fallen from September to November, so when we take a look at October and November consumption figures, we may see an increase from September's figures, but again, we may not see a year-over-year increase."
With Thanksgiving just a few days away, Donati said it was likely prices will tighten up as drivers make their holiday trips, though fewer motorists are expected to do so this year. Even if consumption does rise over the holiday season, Donati believes gas prices likely would continue to fall through December, just not as fast as they have been.
"It's not that we're going to continue to see these drops of 15, 20 cents a week that we've seen for the last several weeks or so," she said. "But given the state of the economy, the fact that crude oil is continuing to trade in the low $50 range ... and the fact that demand continues to be below year-ago levels, we are anticipating that prices will continue their descent through the end of the year."
In the meantime, Arizona remains in the upper half of state-by-state gas prices. Missouri remains the lowest in nation, paying only $1.592 per gallon, while New York pays $2.30, the highest in the lower 48 states.
Alaska and Hawaii remain outliers as always, paying $2.865 and $2.858 per gallon respectively.