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Gas prices drop nationwide, but not in Hawaii

By Jonathan Fahey

AP Energy Writer

POSTED:
LAST UPDATED: 11:11 a.m. HST, Sep 25, 2011


NEW YORK >> Soaring gasoline prices are in the rearview mirror nationally, but not in Hawaii.

For the first time in months, retail gasoline prices have fallen below $3 a gallon in places, including parts of Michigan, Missouri and Texas. And the relief is likely to spread thanks to a sharp decline in crude-oil prices.

However Hawaii remains the only state in the nation with average regular gas prices above $4 a gallon and prices are continuing to rise. The average price of a gallon of gas statewide today is  $4.24 a gallon, up 3 cents from last week and 15 cents from last month, according to the AAA fuel gauge report. Gas is still 34 cents below the record high of $4.59 set in May. Honolulu's average gas price is $4.13, up 4.5 cents from last week.

The national average for regular unleaded gasoline is $3.51 per gallon, down from a high of $3.98 in early May. Last week's plunge in oil prices could push the average to $3.25 per gallon by November, analysts say.

Economist Philip Verleger equates it to "a stimulus program for consumers," leaving them more money for clothes, dinners out and movies. Over a year, a 50 cents-per-gallon drop in gasoline prices would add roughly $70 billion to the U.S. economy.

Arthur De Villar, a 48-year-old safety inspector for the Federal Aviation Administration, paid $2.96 for gasoline near his home in Manchester, Mo., a suburb of St. Louis — and he recently replaced his SUV with a four-door sedan.

With three boys at home between the ages of 11 and 14, the money De Villar saves on gas still gets spent. But it goes to the amusement park, a Cardinals baseball game or the movie theater.

"It's far better to be able to put (the money) anywhere other than in the gas tank," he says.

Prices for oil, gasoline and other commodities dove last week along with world stock markets over concerns the global economy is headed for another recession. When economies slow, demand for gasoline, diesel and jet fuel falls as drivers cut back on trips, shippers move fewer goods and vacationers stay closer to home. Oil fell to $79.85 per barrel Friday, a drop of 9 percent for the week. Oil reached a three-year high of $113.93 on April 29.

Economists caution that gasoline savings, while welcome, won't matter much to people if the worst economic fears come to pass.

"Yes it produces some relief, your bill at the gas pump goes down, but it's going down because there are worries that people won't have jobs," says James Hamilton, an economics professor at the University of California, San Diego. "The news has not been good."

And gasoline prices remain historically high. Gasoline has averaged $3.56 this year, the highest yearly average ever. Americans have cut back driving in the face of high prices, but they are likely to spend more on gasoline in 2011 than ever before — close to $490 billion, according to Tom Kloza, chief oil analyst at the Oil Price Information Service.

Kloza says the latest drop in prices will stick around through most of the fall. And while that may only add $20 a month to a typical commuter's wallet, drivers say it matters.

Pat Wolf, 60, a retired information technology professional from East Lansing, Mich. responded with a "Holy Mackerel!" when he got a text from his wife Friday morning that said a station nearby was selling gas for $2.98 per gallon.

Wolf said prices in the area were $3.49 earlier in the week and he had no hope that they'd fall below $3. "It's one other thing in the back of your mind if you are deciding whether to buy some gizmo or other," he says.

Aureleano Duran, a house painter in Dallas, gave the cashier at a RaceTrac gas station $55 to fill up his red Dodge pickup Friday night, but the tank began to overflow before he shut off the nozzle — at $49.21. Duran plans to sock away roughly $30 a week in gas savings. "I'm trying not to spend a lot of it," he said. Then he excused himself: "I've got to go get my change."

Gasoline prices have always varied from state to state, but the gap now is especially big. Drivers along the coasts are paying significantly more than drivers in the middle of the country, analysts say. California drivers are paying the highest average price in the lower 48 states, at $3.89 per gallon on Sunday. Missouri drivers are paying the least, $3.21 per gallon, according to AAA, OPIS and Wright Express.

Differences in state taxes explain much of the gap. Another factor is that most of the oil used by refineries on the coasts comes from overseas, making it far more expensive than oil piped to refineries in the middle of the country from places such as North Dakota and Canada. The coastal refineries must compete with the growing economies of Asia for shipments of oil.

Patrick DeHaan, senior petroleum analyst at GasBuddy.com, says that while he expects the national average to fall to between $3.25 and $3.50 between now and Thanksgiving, some areas could hit $2.50. He says prices in Lansing, Mich., and St. Louis had fallen below $3 already. A price war between filling stations near Bridge City, Texas, pushed prices to $2.62 last week.

"In some of these areas prices are collapsing," DeHaan says.

The trend could reverse, analysts say, if the world economy does not descend into recession. That's because the growth in oil demand from China and other developing nations will more than make up for falling demand in Europe and the United States.

The investment bank Goldman Sachs forecasts that oil will rise to $120 per barrel within the next six months. That's a jump of 50 percent from last week's closing price of just under $80 per barrel.

"Whatever we see gas prices falling to, it won't be the new normal. It will be a launching pad for winter and spring prices," says Kloza, from Oil Price Information Service.

AP Business Writer David Koenig contributed to this report from Dallas.







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papajoe2 wrote:
Why are ours so high? Greed? 79.85 a barrel and we are still paying the higher price even though the rest of the nation drops.
on September 25,2011 | 11:42AM
HoldEverything wrote:
so what else is new? We've been taking it in the shorts for years with higher gas prices. Unfortunately, no one has been smart enough to overcome the double-talk, mumbo jumbo, and voodoo economics from the oil companies and gasoline distributors with respect to why prices are always so much higher here. We even have a refinery, which doesn't seem to make a whit of difference. This is a state run by corporate vampires who are sucking the blood out of us while allowing us to somehow survive to produce more blood.
on September 25,2011 | 12:10PM
HoldEverything wrote:
so what else is new? We've been taking it in the shorts for years with higher gas prices. Unfortunately, no one has been smart enough to overcome the double-talk, mumbo jumbo, and voodoo economics from the oil companies and gasoline distributors with respect to why prices are always so much higher here. We even have a refinery, which doesn't seem to make a whit of difference. This is a state run by corporate vampires who are sucking the blood out of us while allowing us to somehow survive to produce more blood.
on September 25,2011 | 12:10PM
livinginhawaii wrote:
Our gas prices are so high partially due to the greed of our politicians and their overtaxing of gas. They also need to fund their 36% pay increases. The voters voted in all of the incumbants so they too must be cool with high gas taxes.
on September 25,2011 | 12:25PM
Manapua_Man wrote:
Not too long ago. State lawmakers tried to make a cap on the price of gas here in Hawaii but no one wanted to give it a chance.
on September 25,2011 | 10:26PM
1local wrote:
Hawaii lawmakers won't do anything. If you want anything done the federal government will need to get involved. Tesoro is out to make a killing by gouging the people of Hawaii in order to maintain their own profits...
on September 25,2011 | 12:36PM
Kawipoo wrote:
The uniformed should remain quiet and not show ignorance.
on September 25,2011 | 12:58PM
honopic wrote:
The "uniformed"? Are you talking about military, police, fire-fighters, security personnel or team athletes? Before you call other people ignorant, perhaps you should learn how to spell.
on September 25,2011 | 03:46PM
wilipule wrote:
Goes to show you how gasoline gurus in Hawai'i along with the consumer protection agency keep the people here scrambling to live in a deflated economy. The gas guys make the dough; the good guys get the proverbial "screw." I agree with what I've read hear in the comment section. I'm not the only one who feels this way. What does our government do? It goes along, to get along just to get the taxes from the folks that have to drive to get anywhere in Hawai'i. There's yet to be a politico that demonstrates a willingness to take on the BIG BOYS. No profiles in courage! Auwe!
on September 25,2011 | 12:43PM
honopic wrote:
To Kawipoo: The "uniformed"? Do you mean military people, police, fire-fighters, security personnel, or team athletes? Before you call others ignorant, perhaps you should learn how to spell.
on September 25,2011 | 03:48PM
PCWarrior wrote:
On issues that really count, really matter, Hawaii's politicians are inept, powerless, flacid and weak. Word to your mother.
on September 25,2011 | 04:41PM
jkjones wrote:
panos for mayor? maybe now voters understand the need to elect someone who is not a career politician with a mindset on reducing government and deficit spending. the rail hasnt begun to squeeze more money from our pockets in the form of taxes. it's going to get nasty folks.
on September 25,2011 | 09:05PM
hon2255 wrote:
Once again the monopoly called Chevron and Tesoro are dictating prices here ,Chevron in particular been refining here over 50yrs plus, how ironic state of Nevada has no refineries ,yet their gas prices are 50 cents cheaper than it is here where we have not one but two refineries, do I say PRICE FIXING , DUAL MONOPOLY , we are screwed ,they put dollars in the pockets of who ever is running the state. The democratic administration if it wants to help the majority of citizens here ,should install the gas price ceiling once again and have it follow pricing in the midwest and southwest.
on September 25,2011 | 10:03PM
hon2255 wrote:
WE THE PEOPLE ARE BEING RIPPED OFF BY THE DUOPPOLY THAT EXIST HERE WITH THE TWO REFINERIES, AND HOW IS IT THE STATE OF NEVADA WITH NO OIL REFINERIES ESPECIALLY TAKE LAS VEGAS ,PRICES ARE 50 CENTS CHEAPER THAN ON OAHU, WHAT THE HECK , MR ABERCROMBIE, AREN'T YOU FOR THE LITTLE GUY, THE EVERYDAY JOE THAT BUST THEIR BUNS TO PAY THE MORTGAGE, PUT PRICE CONTROLS ON GAS IN EFFECT NOW BASED ON SOUTHWEST AND MIDWEST PRICES. HELLO!!!!!
on September 25,2011 | 10:10PM
Manapua_Man wrote:
Is this supposed to be news?
on September 25,2011 | 10:38PM
volcanohereicome wrote:
It's not dropping in Connecticut, either. It's still around $4.00/gal, with no signs of dropping. They call it "zone pricing" here, but no one can really explain why we have it.
on September 26,2011 | 01:45PM
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