GAITHERSBURG, Md. -- Fall officially starts next week, and consumer gas-price website GasBuddy predicts that U.S. drivers can expect to see the cheapest gasoline prices for this season since the autumn of 2010. The current GasBuddy National Average has fallen to $3.377 per gallon, it said, the lowest since Feb. 22 of this year.
Analysts for the company that manages the price-saving app project that the U.S. average prices this fall will bottom between $3.15 and $3.25 per gallon and stress that more than 30 U.S. states will at least occasionally see pump prices below $3 per gallon.
The cheaper fuel costs could even provide a catalyst for consumer spending, said GasBuddy. Last September, U.S. motorists meted out approximately $40 billion for their gasoline, but this year's September bill should be about $2.5 billion lower. In 2012, Americans paid more than $41.25 billion for their September fuel.
Three major developments have coalesced to provide this downward pressure on retail gas prices.
1. International crude prices are more than $15 per barrel below the June 2014 peak witnessed in the aftermath of Iraqi violence. North American crude prices are still $2 per barrel to as much as $17 per barrel cheaper than those global numbers, thanks to U.S. production that is at 28 year highs.
2. Autumn also brings changes in the "recipe" for U.S. gasoline. Every state with the exception of California can now use autumn and winter blends of gasoline that are easier for refiners to produce. (The Golden State switches to the cheaper fuel on Oct. 31.)
3. Lower fall demand should also be a factor in the upcoming gasoline price slide. Americans may drive about as much as they did last autumn, but from now until the winter solstice, gasoline consumption tends to be about 12 million gallons per day lower than the summer driving season. More efficient vehicles and less driving by millennials may temper demand further.
"You may not see $3-per-gallon gas if you live in California, New York, Connecticut or Chicago," said Tom Kloza, chief oil analyst for Gaithersburg, Md.-based GasBuddy. "But we believe that more than 30 states could see prices fall below that number during the Christmas shopping season."
He said that as of Sept. 16, there are 17 states that find at least some retailers beating the $3 mark for unleaded regular: Alabama, Arkansas, Georgia, Iowa, Kansas, Louisiana, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, and Virginia.
Several Metropolitan Statistical Areas (MSAs) will soon drop below the $3 mark, said GasBuddy.
There are also a handful of states that are likely to see stations with prices under $3-per-gallon gasoline this fall and winter: Minnesota, Florida, North Carolina, Nebraska, Maryland, Arizona, Delaware, Kentucky, Indiana, North Dakota, Utah, Wyoming, Illinois, and Montana.
Only four states find current gas prices higher than they were one year ago; however, GasBuddy said it expects that average prices in these states--Colorado, Nevada, Oregon and Washington--will soon slip below year ago levels.
Springfield, Mo., currently represents the MSA with the lowest average gas price, at $3.005 per gallon. In second place is Rock Hill, S.C., at $3.047, followed by Lynchburg, Va., at $3.049.
States served by refiners in huge Gulf Coast refineries--Texas, Louisiana and Mississippi--should see the cheapest national numbers. The highest prices will continue to be found on the U.S. West Coast, but price drops in that region could be most severe in November and December.
GasBuddy projected that the U.S. motor fuel bill this month will be about $2.25 billion under the Sept. 2013 cost, thanks to a combination of lower prices and flat demand. Americans are likely to spend about $37.5 billion this month, compared with $39.75 billion in Sept. 2013 and $41.28 billion in Sept. 2012.
So far in 2014, U.S. gasoline prices have averaged just over $3.51 per gallon, said GasBuddy, compared with exactly $3.57 per gallon last year. GasBuddy said that it believes that when 2014 is complete, this year's average will fall just below $3.45 per gallon, continuing a slow downtrend that commenced in 2012.
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