TAMPA, Fla. — The national average price for a gallon of gasoline on Sunday was exactly $2 a gallon, and Monday the price should hit $1.99 for the first time since March 2009. Motorists can find gas prices below $2 at 68 percent of gas stations nationwide, according to the weekly fuel price report from AAA.
"A global oversupply of oil has led to the lowest gas prices for the year-end holidays since 2008," said Mark Jenkins, spokesman, AAA - The Auto Club Group. "This will make travel more affordable for the 91.3 million Americans forecast to drive during the next two weeks."
AAA estimates that cheaper gas prices have saved Americans more than $100 billion on gasoline so far this year compared to 2014, which works out to nearly $550 per licensed driver in the country. Americans are on track this year to drive a record number of miles, largely due to lower gas prices and a stronger economy, based on early estimates by the Federal Highway Administration. Through September, which is the most recent data available, Americans have driven 2.4 trillion miles for the year, which is a 3.5 percent increase over 2014.
Gas prices have dropped because there is more than enough oil and gasoline supplies around the world to meet current demand. In addition, gas prices generally fall through early winter because people drive less this time of year. Prices could decline even more over the coming weeks, but it is hard to know how much.
Domestic supplies of commercial crude oil are about 29 percent higher than a year ago, according to the Energy Information Administration, while oil prices are $72 per barrel cheaper than in the summer of 2014. Oil is the primary cost associated with making gasoline, and every $10 decline in the cost of oil can reduce gas prices by nearly 25 cents per gallon.
Gas prices are already much cheaper than $2 per gallon in Georgia ($1.92) and Tennessee ($1.79). The average price in Florida ($2.02) could dip below $2 this week, if the price keeps falling at a rate of a half cent a day.
Average gas prices last fell below $2 per gallon for a brief span between November 2008 and March 2009 during the height of the Great Recession, as weak global demand and a significant decline in driving helped push prices down. Prior to that four-month period, average gas prices were last below $2 per gallon in early March 2005.
Based on normal seasonal trends, gas prices will likely rise in late winter and early spring, as refineries conduct maintenance in advance of the busy summer driving season. Despite this expected price increase in early 2016, gasoline should remain relatively low due to abundant petroleum supplies.
