Amid epically long lines at gas stations and pervasive fear and panic among drivers in areas hit hard by Hurricane Sandy, entrepreneurs have jumped into action. Ads on Craigslist reveal that a black market for gas has emerged, with opportunists offering gallons of regular at $8, $10, even $25 apiece—sometimes with delivery included. (How nice.)
Nonetheless, around the country, and even in states affected by Sandy, another trend has arisen, with gas prices dropping dramatically pretty much everywhere. According to Reuters, gas prices nationally decreased nearly 21¢ over the two-week span ending November 2. That’s the steepest dip measured since 2008, when demand for gasoline plummeted amid the onset of the Great Recession.
The black market notwithstanding, gas prices remain relatively low in New York and New Jersey – averaging $3.96 and $3.61, respectively, as of Monday per the AAA Fuel Gauge Report. Elsewhere around the country, prices have been falling sharply. The average in California has hit $3.98, after going up to $4.67 as recently as early October. As of Saturday, reports the Sacramento Bee, the average in the metropolitan area was $3.82, representing a decline of 18¢ in a week and 55¢ in a month.
Last week, the Mercury News estimated that gas prices at gas stations in the San Francisco Bay area had dropped as much as 81¢ over the prior month.
It isn’t just California and the West Coast experiencing major relief at the pump. Gas stations all over St. Louis began charging under $3 last week, after reaching an average of $3.77 in mid-September. Bizarrely, there have even been gas stations in Alabama lowering prices 16¢ in a single day.
There are several reasons for the broad decline in gas prices, including a seasonal fall-off in demand and the disappearance of refinery problems in the West Coast. Hurricane Sandy has also played a role. The storm was the rare natural disaster that didn’t boost gas prices. In fact, Sandy has pushed them lower.
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While the enormous gas station lines in the New York metro area may suggest otherwise, overall demand for gasoline has declined in the region as fewer people have been commuting to work—or even able to drive since their cars have been ruined. “The Northeast is a significant gasoline consumer and not a major producer, so the drop in demand should be much greater than the effect on supplies,” Michael Green, a spokesman for AAA, told MarketWatch.
Let’s keep the recent price dip in perspective, however. The national average of $3.47 is still 6¢ higher than the average from one year ago. We are still on pace to register the priciest year ever for gasoline.
Some states are experiencing much pricier years than others. It was recently announced that California drivers have already paid a record-high $8.2 billion in state and local fuel taxes for the 2011-2012 fiscal year. Stats citied by the Los Angeles Times indicate that California is on pace to average above $4 per gallon in 2012. That blows away the previous high, which no longer seems all that high, all things considered: $3.81.