Gas prices fall below $1.50 for first time in at least four years

KIT DOYLE ~ kdoyle@semissourian.com Gas has dropped below $1.50 for the first time in several years. [Click to enlarge]

The price of gasoline fell below $1.50 a gallon Thursday in Cape Girardeau, the lowest cost in at least four years.

Some stations remain above that mark, but prices at most stations have fallen by 50 cents a gallon over the last four weeks and are less than half the price being charged as little as two months ago. The average price statewide for regular gasoline peaked in July at $3.95 per gallon.

The prospects look good for continued price cuts. The benchmark price for crude oil fell to $43.67 a barrel Thursday on the New York Mercantile Exchange, and the January delivery price of unleaded gasoline fell to just under 97 cents a gallon.

The price of each gallon includes 35.4 cents in state and federal fuel taxes.

"I'm saving $20 to $25 every time I fill up," said Karen Fowler as she finished pumping fuel into her Chrysler Sebring at the Cash Only station on Bloomfield Road. "It is going to make a lot better Christmas."

The extra cash also means she can spend a little more at the grocery store and buy some clothes she has delayed purchasing, Fowler said.

The lower prices are a good thing, but the reasons behind the decline are troubling, said Mike Right, spokesman for AAA of Missouri. Oil consumption is down worldwide, he noted, and countries that depend on oil revenue seem ready to cut production in an attempt to drive prices up.

The Organization of Petroleum Exporting Countries, or OPEC, cut its production target by 1.5 million barrels a day in October to stem falling prices. Leaders of the cartel countries will meet Dec. 17 to consider additional reductions.

"There are people working night and day to see to it that it doesn't go any lower, and they may very well succeed," Right said.

Consumption of gasoline and diesel in Missouri is at its lowest level in at least five years. According to figures from the Missouri Department of Revenue, motorists have used 3.7 percent less fuel through the first 10 months of the year than in 2007. That translates into 136 million fewer gallons than during the same period last year. It is 104 million gallons less than was consumed during the first 10 months of 2004.

The best part of lower prices is the effect on individual finances. People who use an average of 20 gallons a week will save almost $50 a week compared to the peak price, or more than $2,500 if the lower prices continue throughout the coming year.

"I don't know if it is offsetting a whole lot of what family budgets are going through to try to cope," Right said.

The high cost of fuel earlier in the year, combined with record high commodity prices, helped push the price of everything from breakfast cereal to airline tickets higher. Job losses that have combined with devastating declines in long-term retirement savings due to stock market drops are having a bigger actual and psychological impact on consumers than what could be a temporary dip in fuel costs, Right said.

"I am delighted it is lower, but it could very well be an indication that things are getting worse," he said. "Are you better off with $4 gas you can afford or $1.50 gas you can't afford to buy?"

That question doesn't seem to be on the minds of people as they pay $20 for a tank of gas that would have cost them $40 just two months ago, said Joyce Newell as she accepted payment at Cash Only. "They keep saying they really love the price," Newell said. "They are getting more for their money, and they seem pretty happy about it."

rkeller@semissourian.com

388-3642

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