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Gas Prices Drop Slowly After Record Climb

By Joe Benton
ConsumerAffairs.com

October 21, 2005
Gasoline prices continue dropping but the decline is far slower than the rapid run-up in prices following Hurricanes Katrina and Rita. The nationwide average price for a gallon of regular unleaded is now $2.69.

That means the average price for regular unleaded is only 12 percent lower than it was when prices hit a record high of $3.05 on Labor Day.

Wholesale gasoline prices have dropped 1.81 cents to $1.5950 a gallon and suggest retail prices are almost 75 cents higher than before the hurricane squeeze.

Analysts suggest the market will recover slowly. Oil prices tend to follow the adage of rising like a skyrocket and falling like a feather.

Hawaii still suffers with the highest average price for a gallon of regular unleaded at $3.28. People in Oklahoma enjoy the cheapest gasoline with an average price of $2.33.

U.S. government data released Wednesday shows demand for all petroleum products fell by 3.2 percent from the same period last year, a bigger drop than last week's 2.8 percent. The report said demand for gasoline fell 2.2 percent.

Five U.S. oil refineries remain closed following hurricanes Katrina and Rita accounting for 1.31 million barrels per day (bpd) of fuel production, or 7.7 percent of the nation's capacity.

Here’s a look at gas prices around the country:

Los Angeles: Gasoline prices in Southern California declined for the second straight week led by lower demand, according to the Automobile Club of Southern California's Weekend Gas Watch.

The average price of self-serve regular gasoline in the Los Angeles-Long Beach area is $2.901, which is 5.6 cents lower than last week, 5 cents lower than last month and 44 cents higher than last year.

In San Diego, the price is $2.932 - 6.1 cents below last week's price, 5 cents below last month and 47 cents above last year.

On the Central Coast, the average price is $2.991, down 3.4 cents from last week, 6 cents lower than last month and 43 cents higher than last year.

In the Inland Empire, the average price is $2.914, down 6.5 cents from last week, 6 cents below last month and 46 cents higher than last year.

Houston: Gas prices are plummeting across the state because of falling demand. The price of regular unleaded self-serve gasoline fell almost 14 cents a gallon in the past week to just under $2.68 per gallon.

The largest decrease is in Fort Worth, where prices fell nearly 22 cents a gallon to $2.66.

The lowest average price is in Corpus Christi at $2.60 a gallon. The highest average price is in Galveston-Texas City, where the price fell an average of eight cents to $2.79 a gallon.

Phoenix: The good news at the pump is gas prices continue to fall despite a hurricane threat in the Gulf of Mexico.

Prices tumbled 7.8 cents in the past week to an average of $2.79 a gallon for unleaded. This is the largest decline since Hurricane Rita tore through Texas September 24.

The cheapest gas in Arizona can be found in Yuma with an average price of $2.71.

The highest priced gasoline is in Flagstaff where AAA says a gallon of unleaded on average costs $2.89.

Ohio: Gasoline prices, which peaked at more than $3 a gallon after Labor Day, have fallen 10 percent to 15 percent - to levels last seen during the dog days of August.

The price of a gallon of regular unleaded gas was $2.63 in Southwest Ohio and $2.83 in Northern Kentucky.

According to Cincinnati AAA, the average price is $2.59 in Southwest Ohio and that is down 50 cents a gallon from a peak of $3.09 on Labor Day weekend. Hurricane winds are blowing toward Florida, but they're not expected to blow up gasoline prices at the pump.

Virginia: The average price is $2.69 a gallon, throughout the state. Gas prices have started to fall as a result of a drop in demand and an increase in supply, said energy experts.

People drove less because of high gas prices, and family members drove the most fuel-efficient cars in their households, according to analysts.

Looking ahead to the Thanksgiving holiday weekend, the busiest travel season of the year, drivers can expect slightly lower prices because all the refineries should be up and running.

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