Gas prices to continue rapid drop
Published 6:11 pm Monday, October 20, 2008
While gas prices have already fallen dramatically over the past month, they could fall even more before bottoming out.
According to AAA, the average gas price for the Birmingham metro area was at $2.98 Monday. A month ago, the average was $3.89. Birmingham’s highest recorded average gas price was $4.05 on Sept. 15 — just over a month ago.
Clay Ingram, AAA-Alabama spokesperson, said prices are falling because of a combination of decreased demand and lower crude oil prices.
“I think over the next few weeks, we’re going to see prices continue to drop,” Ingram said. “Could we see below $2.50 a gallon? Sure, that’s a real possibility. It could possibly get below $2. I can’t say that’s likely, but it’s certainly within the realm of possibility.”
Gas prices typically go down in the fall because of the colder weather. This year’s raised prices were an anomaly that happened because of the hurricanes that hit the Southeast. Before that, however, gas prices were dropping, so prices are now correcting themselves very quickly, Ingram said.
Also, crude oil prices were around $75 a barrel last week, which is about half how much a barrel of oil cost in July.
“The rest of the country has been continuing with the price drop, and we’re catching up now,” he said.
Most places in Shelby County saw gas drop below $3 this week. Monday, a Helena gas station was selling regular gas for $2.66. As cars waited in line to get to a pump, Helena resident Teri Portwood said she was relieved about the price drop because it saves her from driving further to find cheaper gas.
“I can buy closer to home to get my gas,” she said. “I was actually watching the gas prices, which I never used to do.”
Portwood said she’s just keeping her fingers crossed that the gas prices will stay down. It was hard for her to plan effectively with the higher prices, she said.
“I just tried to shop around,” she said. “It was hard to budget.”
Ingram said he expects gas prices to stay low through next February. January and February are typically the cheapest months for gas because people tend to stay home and spend less money after Thanksgiving, Christmas and New Year’s.
However, once the weather starts getting warmer in March and April, prices will rise again because of increased travel and will reach their peak in the summer.
Ingram said prices are higher at some stations because stations buy gas at different times.
“Stations buying gas on Mondays are paying one price for it, and stations buying gas on Friday are paying a much reduced price for it,” he said.
It’s against state law for gas stations to sell gas for less than they paid for it. That’s intended to help small businesses by not allowing big chains to undercut others’ prices and put smaller stations out of business.