$1.70 and falling around Greenville

Published 4:30 pm Monday, December 8, 2008

The area average cost per gallon of gasoline was $1.70 at convenience stores around Greenville on Monday. Just six months ago, residents were paying an average $3.88 per gallon.

“We’ve never seen that before because our gas prices have never been high enough to see it drop like that before,” said Clay Ingram, spokesperson for AAA Alabama.

In Georgiana, travelers were paying $1.80 a gallon and the Gitty-Up-N-Go in McKenzie was offering a county-low $1.58 per gallon of gas on Friday.

The Southeast average is $1.68 per gallon, according to AAA, while people in the Midwest region pay the cheapest amount for gasoline with prices averaging $1.61 a gallon. Cost to fill up a 15-gallon tank on average is $25.55. Six months ago it was $58.68.

Four months ago crude oil was selling for over $150 a barrel on the open market, causing gas prices to skyrocket. On Monday, oil fell below $40 before rebounding to trade at $43 on Wall Street.

Gulf Oil CEO Joe Petrowski told reporters on Monday that oil could fall to $20 a barrel by the first of the year, meaning gas prices would hover around the $1 per gallon mark.

Who would have thought that?

Ingram said the biggest reason gas has dropped so far so fast is because of massive fuel conservation efforts, both in Alabama and across the country.

Secondly, gas prices have dropped because the price of everything has dropped during the country’s economic turmoil. Ingram said he expects to see prices drop even further.

“It’s certainly possible we could get below $1.50 a gallon, and I never thought I’d ever say that again. I’m not saying that will happen, I’m just saying it’s possible,” he said.

Although the holiday season usually means a jump in gas prices because of heavy travel, this year could prove to be the exception.

“There’s a chance, sure, but I don’t think we’ll see much of a jump this year, if any,” Ingram said. “I think it’s probably unlikely at this point because it’s moving downwards so quickly that I don’t see a jump back up.”

While the lower gas prices are, in part, a reaction to the country’s economic woes, Ingram said he thinks the lower prices are a positive occurrence.

“With gas half the price it was two months ago, it gives people a little more breathing room,” he said. “It gives them a little more disposable income they’re not putting in their gas tank. We’ll all have a little more to spend on Christmas.”

Gas prices in Alabama are eight to ten cents cheaper than the national average, which Ingram attributes to the state’s lower cost of living, tax structure and close proximity to the Gulf region pipelines.

Prices will go back up in the spring, but the price jump shouldn’t be as high.

“The last couple years we’ve seen prices jump up very quickly in the spring,” Ingram said. “This time I think we’ll see a slower increase in prices, and less of an increase than we usually do.”

Even though experts expected a price drop, no one could have foreseen prices dropping quite like this.

“I don’t think anyone expected to see it drop this much this quickly,” he said.

Contributing – Amy Gordon, The Shelby County Reporter