Advertisement
Advertisement

Are you happy? Gas under $4 a gallon

Share

Higher supply, declining demand, and a little tax break from the state have pushed the average price for a regular gallon of gasoline in San Diego County below $4 for the first time since March.

On Monday, the price for a gallon of regular unleaded here cost $3.97, down four cents from a week ago, but a larger drop from the average $4.14 per gallon price a month ago, the Auto Club of Southern California reports.

The price for a gallon of gas fell below the $4 threshold Friday. So far this year, the highest price for gasoline has been $4.29 on April 29.

Advertisement

Charles Langley, a San Diego-based gasoline analyst, said an oversupply of gas is causing the drop.

“There’s more surplus being made available now to unbranded, independent stations. They’re lowering the price and it’s making it difficult for the major brands to compete without lowering their price,” he said. “As soon as that situation changes, the price will go up.”

Langley said a huge spike in oil prices would change the situation, but that oil has been on the decline. For instance, a barrel of the benchmark West Texas Intermediate oil dropped to $101.71 on Monday. Langley said he was fascinated that the shooting down of Malaysian Airlines Flight 17 over Ukraine, and the unrest in Israel and Gaza have not caused oil prices to jump.

“All that stuff was really a good excuse for the market to rally and to drive oil prices up high, and that did not happen at all,” he said. “It suggests to me that oil supplies are relatively abundant, especially here in the U.S.”

Gregg Laskoski, Senior Petroleum Analyst at Gasbuddy.com, which has its own data that follows a similar pattern, said basic fundamentals are contributing to the drop in prices, which the website reports to be $3.95 per gallon.

“We have a very healthy supply, refinery operations are doing very well right now, and at the same time even though we’re in the summer driving season, consumer demand has not been remarkable,” he said.

Laskoski said Americans are driving less as they age, and also newer cars are more efficient, keeping demand down. He said the state in September will switch to its winter blend of gasoline, which should push prices lower, wherever they may be at that time.

Also helping push the price just below $4 is the state Board of Equalization lowering the per-gallon excise tax on a gallon of gas by 3.5 cents per gallon on July 1, the start of the fiscal year.

Fuel prices were last this low on March 15, when a regular gallon of gas cost $3.99. It rose to $4.29 on April 30 before beginning to fall.

A year ago at this time, San Diegans were paying $4.05 per gallon.

In Southern California, only Los Angeles remains above $4 per gallon on average. Nationwide, the average gallon costs $3.52, down from $3.63 a year ago.

Advertisement