Gas Prices Continue To Plummet, Could Fall Below $1 Per Gallon: Analysts

By MARC TORRENCE (Patch National Staff)

As gas prices continued to plummet Tuesday, experts predicted that the cost of a gallon could eventually fall below a dollar in some places before everything is said and done.

Prices are especially low in the Midwest and Great Plains, where a perfect storm of leftover gasoline, retail chain behavior and the nationwide price of oil has dropped average statewide gas prices to as low as $1.37 per gallon and nearly $1.70 nationwide, GasBuddy Senior Petroleum Analyst Gregg Laskoski told Patch.

In Michigan, for example, Tuesday prices were down 2.6 cents from Monday’s average of $1.498, 10.7cents from last week’s average of $1.579, down 37.3 percent from last month’s average of $1.845 and 70.3 cents from last year’s average of $2.175.

Several factors are at work.

Companies are currently trying to run through “huge” supplies of winter-blend gasoline, Laskoski said, which will be swapped out for a more fuel-efficient, but more expensive, blend in the summer months, as mandated by the EPA.

In Great Lakes states like Michigan and Wisconsin, a small handful of retail gas chains dominate the area, pushing gas prices down even further.

“It’s a retail environment that the federal government refers to as ‘price cycling,’” Laskoski told Patch.

“It’s typically where a small number of dominant retail chains will push prices as low as they can go, sometimes even to the point where they’re taking a loss on the gas, simply to drive traffic into those convenience stores.”

Meanwhile, the West Texas Intermediate, a U.S. benchmark for crude oil, was down more than 4 percent Tuesday, continuing a downward trend over the last 365 days.

It all adds up to gas prices that continue to fall and could reach below a dollar in some places, Laskoski said.

The nationwide average as of 4:10 p.m. ET Tuesday was $1.719 per gallon, down 7 cents from last week, 25.8 cents from last month and more than 45 cents from a year ago, according to GasBuddy.

The lowest gas prices in America are in Oklahoma, a state centrally located to major refineries and gas supplies, where the statewide average is $1.37, followed by Indiana ($1.46), Kansas ($1.46), Ohio ($1.48), Michigan ($1.49), GasBuddy says.

When will it end? Analysts say it’s hard to tell (and if they did know, they’d be heading to their nearest lottery retailer and stock broker, too).

Laskoski said it isn’t unreasonable to think that the national average could drop anywhere from 5 to 10 more cents per gallon before winter reserves run out, the price of oil levels out and gas prices start to increase again.

“We know prices will hit a plateau, but sometimes you won’t know it’s a plateau until it’s in the rearview mirror,” he said. “There’s a lot of moving parts.”

You can find the price of gas in your area by typing in the zip code here: