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Gas Price Decline Slows, Supplies Scarce

California Prices Best of Summer

By Joe Benton
ConsumerAffairs.com

August 31, 2007

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The steady five-month decline in gasoline prices seems to have ended as the average national price for regular self-serve ticked up this week settling in at $2.78 a gallon on the eve of the Labor Day weekend.

The average price for regular is now above $3 in 8 states -- Wisconsin, South Dakota, Nebraska, Minnesota, Michigan, Illinois, Hawaii and Alaska.

Even though gas prices are at their lowest levels since April in some parts of the country and about a dime lower than a month ago, roughly 100,000 fewer people plan to travel by car this Labor Day weekend, according to the Automobile Association of America.

The auto club's annual Labor Day survey found that 28.9 million people will travel by car over the long weekend, down from 29 million last year.

One month ago a gallon of regular self-serve gasoline cost an average price of $2.87, according to AAA. One year ago a gallon of regular cost $2.81 a gallon, according to the auto club.

Scarce Supply

U.S. gasoline supplies are the lowest ever recorded in terms of demand, just 20 days of average fuel consumption, the Energy Information Administration said Wednesday.

"This is even fewer days than seen following the hurricanes in 2005," the EIA said in its weekly review of the oil market. "While the absolute level of total gasoline inventories has been slightly lower a few times in recent years, when the level of demand is taken into account, it has not been this low before."

The low gasoline inventory will not likely cause a sharp spike in retail fuel prices,but will limit the usual decline in pump prices after the Labor Day holiday, according to the EIA.

The most expensive gallon of gasoline in the country is still found in Chicago, Illinois for $3.59. The cheapest gallon of regular is on sale in South River, New Jersey for $2.35. New Jersey also has the lowest statewide average gasoline price at $2.54.

Here is a look as some gasoline prices from around the country in the weekly ConsumerAffairs.com Gas Price Round Up.

California: The state typically has the highest gas prices in the continental U.S. but fires and flooding at gasoline refineries in the Midwest and the Gulf Coast have pushed up prices elsewhere as the California average has drifted down steadily.

California drivers now spend just two cents more per gallon than other Americans. The state's average for regular gas stands at $2.80, according to the AAA auto club. The national average is $2.78.

"Our prices have gone down, but other peoples' prices have come up, and that's made the difference," said Sean Comey, spokesman for the AAA of Northern California. "Our gas costs are down, but they're still pretty high if you think about them in the grand scheme of things."

California, for once, seems to be in better shape than the rest of the country. The state's supply of finished gasoline is 12.6 percent higher now than it was last Labor Day, according to the California Energy Commission.

Southern Californians planning to get away this holiday weekend will fill up their tanks for less compared to Labor Day in 2006, according AAA.

The average price of self-serve regular gasoline in the Los Angeles-Long Beach area is $2.73, which is 5.5 cents cheaper than last week, 31 cents below last month, and 40 cents under last year.

In San Diego, the price is $2.80, which is 3.4 cents below last week's price, 26 cents under last month, and 32 cents cheaper than last year.

On the Central Coast, the average price is $2.96, down 5.2 cents from last week, 29 cents under last month, and 38 cents below last year. In the Inland Empire, the average price is $2.74, 4.3 cents below last week, 27 cents under last month, and 41 cents cheaper than last year.

"These are the best gas prices of the summer, with almost all Southland gas stations posting regular unleaded prices well under $3 a gallon," said Auto Club spokesperson Carol Thorp.

Texas: Motorists traveling for the Labor Day holiday will be paying less for gasoline, compared to last year according to the AAA Texas Weekend Gas Watch.

Amarillo and Corpus Christi are the two exceptions.

The statewide average is $2.66 a gallon and that is down three cents this week and four cents less than last year.

"The Labor Day holiday is seen as the end of the summer driving season," said AAA Texas spokeswoman Rose Rougeau. "Fuel prices generally move downward as demand for fuel lessens."

Amarillo once again tops the list, with the highest average at $2.93, up three cents in a week and 17 cents higher than the $2.76 average posted a year ago.

Corpus Christi, the state's lowest average at $2.57, is down seven cents in a week and is five cents higher than the $2.52 average held a year ago.

North Carolina: AAA is not expecting to see gas prices jump as you hit the road for Labor Day. The average price in North Carolina Friday morning was $2.68. That's almost a dime cheaper than the national average of $2.77.

While prices are not expected to jump right for Labor Day, they're also not expected to drop much after the holiday passes. That's because the Energy Information Administration says gas supplies are at their lowest level ever in terms of demand, less than after Hurricanes Katrina and Rita struck in 2005.

Maryland: For the last big travel weekend of the summer, hundreds of thousands of people will be hitting the road in Maryland just as gasoline prices hit a five month low.

About 652,000 Maryland residents are expected to hit the road for the Labor Day weekend, according to AAA numbers.

In Maryland, the average price for regular unleaded gasoline is $2.67, which has not been seen at gas pumps since early April, said Troy Green AAA Mid-Atlantic public affairs specialist. This Labor Day, gasoline is 21 cents cheaper than it was at the same time last year in Maryland.

Despite the dip in cost, the amount of travelers for Labor Day weekend is expected to be the same as last year.

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