$3 gas is back if anyone cares

Gut-wrenching declines in the stock market, a financial panic that some have compared to the Great Depression and the realization that the U.S. may be headed to its worst recession in over a generation have trumped what should otherwise be good news: The return of $3-a-gallon (or less) gas.

Better yet, with 401(k) statements arriving in the mail and families worried about keeping their homes, has anyone even noticed?

A gallon of regular gasoline fell .049 cents overnight to a new national average of $2.991 on Saturday, according to auto club AAA, the Oil Price Information Service and Wright Express. Prices have not been below $3 nationally since Feb. 16.

Saturday's price was slightly above the national average price of $2.81 a year ago, but 27 percent lower than the all-time high of $4.114 reached July 17. Before Saturday, gas prices already were below $3 in 23 states, according to AAA.

According to the survey, gas was the least expensive in Oklahoma, with a gallon of regular at $2.58. Other cheap states were Missouri and Kansas, while the most expensive was Alaska, with a gallon at nearly $3.92. Hawaii and California also ranked high.

Oil prices, meanwhile, are down $75 — or 51 percent — since catapulting to a record high of $147.27 a barrel on July 11.

"The amount of wealth that has been lost exceeds drops in other costs," said Ben Brockwell, director of data pricing and information servicing for the Oil Price Information Service.

"I'm more concerned about the financial condition of my 401(k) and I am more concerned about the pessimistic view ... of the economy."

Stock prices, already in a bear market, collapsed as credit markets froze, hitting multiyear lows this month. About $2.4 trillion in shareholder wealth was lost just last week alone.

The economy figures to be in a recession as severe as the country has seen since the early 1980s.

The collapse in gas prices comes a month after prices hit $5 a gallon and gas lines formed in some parts of the country after hurricanes Gustav and Ike shut down a portion of the nation's refinery capacity along the Gulf of Mexico.

As refinery capacity has come back online, prices began dropping dramatically and now are approaching levels where they were a year ago.

Gas prices likely will fall further if oil goes down to $50 a barrel, as some analysts suspect it will.

While motorists welcome the decline in prices, they are wary given the huge fluctuations over the past couple of years, said Kit Yarrow, a consumer psychologist at San Francisco's Golden Gate University who has studied how high oil prices have affected Americans' buying behavior.

"People have learned that they can't trust gas prices to stay low," she said.

She said she doubts motorists — who cut fuel consumption as prices rose — will return to their old ways even as prices have come down.

"Everywhere you go, be it the store, the diner, whatever, you hear people talking about their gas costs and how they need to cut back," David Robinson, 67, of Lakewood, N.J., said recently as he was getting coffee at a convenience store. "You still hear it, even though gas keeps dropping."

Others are not so sure.

"Gas prices are crazy, crazy, crazy," said Zena Newson as she prepared to fill up her Dodge Caravan at a gas station near downtown Chicago recently.

Newson, who spends up to $240 a week on gas, said between being a single parent and running a catering business, she can't afford to change her driving habits — high gas prices or no high gas prices.

"I have not changed anything," she said. "We might not eat out as much, (my daughter) might not get those shoes she wants."

Tom Hines, 41, a program manager at a Phoenix utility company, doesn't think the erratic fuel prices have permanently shifted the nation's environmental conscience.

"It's like we've seen in the past," he said. "Detroit will start to produce hybrids and then all of a sudden gas prices go back down and then everybody forgets all about it. I think people are starting to be more aware but I think we still have a long way to go."