Nov 22, 2008 4:28 pm US/Pacific
Gas Dips Below $2 A Gallon In Bay Area, Nation
VALLEJO (CBS 5 / KCBS / AP) ―
If you were planning to head out of town for the upcoming Thanksgiving holiday --and particularly if you weren't -- you might decide to take a drive once you see what gas is going for these days.
Only four months after peaking at an unheard of $4.11 a gallon, the national average price for gasoline has tumbled below $2, its lowest point in more than three years.
Relief at the pump is also starting to trickle over to more service stations around the Bay Area.
Cars have lined up at the Costco stores in San Jose and Santa Clara and at the Arco gas station in Mill Valley with regular gasoline selling for $1.99 a gallon.
But for the lowest of the low, head to Solano County and Vallejo.
At Lee's Grocery on Fairgrounds Drive, just south of Discovery Kingdom, you can gas up for $1.75 a gallon.
At the Bonfair Market across Highway 80 on Redwood Parkway, the going rate is $1.79.
People have been lining up all weekend to take advantage of the nostalgically low prices. AAA reports the cost of gas has dropped $1.20 in California in the last month.
The gas price decrease comes as crude oil has been in free-fall, shedding two-thirds of its value since July. Some analysts said oil could be headed below $40 a barrel, and gasoline below an average of $1.50 nationally.
The national average price fell nearly a dime in the past week and almost 90 cents in the past month. The average price for unleaded is now below $2 in 30 states, according to AAA.
"It's impossible to know exactly how low the price of gasoline will eventually go," AAA spokesman Geoff Sundstrom said. "Households can, however, reasonably anticipate that lower fuel prices will be the norm throughout the rest of this year and probably into early 2009."
The Federal Highway Administration reported this week that Americans drove 10.7 billion fewer miles in September than a year ago, the 11th straight monthly decline.
But there's some evidence that motorists may be heading back to the pump in greater numbers as gasoline prices fall.
MasterCard SpendingPulse reported that even though gas consumption last week was down 2.8 percent from a year ago, it was the smallest year-over-year decline in more than two months.
In Ohio, where gas prices fell to an average of $1.79, Laura Duemey, a 48-year-old receptionist from Columbus, fueled up her Hyundai XG350 sedan.
"It's awesome," Duemey said. "With this gas guzzler, there was no way I could afford to keep paying the way (prices) were going."
Oil prices have been crushed as the global economic downturn has diminished demand.
How low prices can go is anyone's guess.
"Do not trust anyone in this market who tries to convince you that oil cannot go below $40," said one analyst report issued Friday. "The same way no one had a clue how high prices could go last July, there is no telling how low we can go now."
(© CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. Bay City News contributed to this report.)
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