Gas under $2 for first time in years

Published 4:30 pm Thursday, November 20, 2008

Shelby County residents should have a little more Christmas money after seeing gas prices fall under $2 this week.

This is the first time gas has been below the $2 mark since June 1, 2005, said AAA spokesperson Clay Ingram.

The drop in gas prices has been meteoric, with gas prices dropping by $2 in less than two months. On Sept. 16, the average cost of gas in Alabama was $4.05 per gallon. On Nov. 19, it was $2.01 per gallon.

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

He 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.

“Well, if the stock market stays kind of where it has been the last couple of days, we could see prices around $1.60, $1.70 per gallon,” he said. “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.”

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 8 to 10 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.

“If you asked me two months ago if I thought we’d be below $2 this week, I’d have said, ‘Anything is possible, but I don’t think so,’” he said. “I don’t think anyone expected to see it drop this much this quickly.”