Gas Prices on Downward Path, Still High

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Gas prices are falling, but they're still 1/3 higher than just a year ago.

Gas prices are falling, but they’re still 1/3 higher than just a year ago.

Normally, we focus on things like the cost drivers pay on their car insurance premiums. But things like the cost of fuel play a big role in total cost of ownership, and how affordable it is for drivers to travel. So what’s the current situation with gas pricing in the United States?

After peaking during the summer at a nationwide average cost of nearly $4.00 per gallon, gas prices have been trending downwards with the approach of fall. According to the data compiled by gasbuddy.com, the average cost of a gallon of regular unleaded gasoline now sits at $3.60.

Patrick DeHann, a senior petroleum analyst at gasbuddy.com told the Denver Post that “it took the end of summer for a drop in retail gasoline prices, but I’m sure motorists won’t complain that we’re finally seeing some drops in prices.”

DeHann is correct that the decrease in gas prices is welcome news, yet we’re certain drivers would like to see further reductions. Prices in September 2011 are still $0.87 higher per gallon than they were a year ago, when the average cost of a gallon of unleaded was $2.73. So even with the downward trend in pricing, drivers are still paying 32 percent more than they did just a year ago.

While it is common for gas prices to rise in the summer, and begin a decline after labor day, much of the most recent increases has been blamed on instability in OPEC nations like Libya. The civil war there effectively removed 1 million barrels a day from global oil supplies, leading to a huge increase in the cost of a barrel of crude oil. With some semblance of stability returning to that nation, the average cost of a barrel of oil has declined by almost $25.

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