Hawaii’s gas prices remain the highest in the nation, but there is some good news.
The statewide average price for a gallon of unleaded gas has dropped to below $4 a gallon this week.
The weekly AAA Hawaii Weekend Gas Watch reports the state average is $3.97 a gallon, 4 cents less than last week, 15 cents lower than last month and 6 cents below last year’s average.
Honolulu’s average price is $3.86 a gallon, which is 16 cents lower than this date a month ago and 7 cents less than last year. Hilo is down to $3.92, 13 cents less than last month and a nickel cheaper than last year.
Wailuku is still above $4, at an average of $4.24 a gallon. The price is still 12 cents lower than last month and 6 cents cheaper than last year.
“Global oil prices continued to rapidly decline helping Hawaii motorists at the retail pump again this week,” said AAA Hawaii General Manager Liane Sumida. “State average prices around the country continue to slide with: Alaska at $3.62 a gallon, California at $3.13 and Oregon at $3.07. Many states show averages in the high $2 a gallon range on www.fuelgaugereport.aaa.com.”
Nationally, the Energy Department predicted Wednesday that the average price of gasoline in the U.S. will be $2.94 a gallon in 2015. That is a 44-cent drop from an outlook issued just a month ago.
If the sharply lower estimate holds true, U.S. consumers will save $61 billion on gas compared with this year.
Rising oil production, particularly in the U.S., and weak spots in the global economy have led to a sharp reduction in oil prices over the past four months. Not seeing much of a change ahead, the government cut its forecast for global oil prices next year by $18 a barrel to $83.
As a result, U.S. drivers will pay on average 45 cents less for a gallon of gas next year compared to this year. Based on expected gasoline consumption, that’s a savings of $60.9 billion.
That may not seem like a lot in the context of a $17.5 trillion U.S. economy, but economists say it matters because it immediately gives consumers more money to spend on other things. Consumer spending accounts for 70 percent of the U.S. economy.
“It would be a reversal of the trend over the last few years where consumers can’t stretch a dollar far enough,” says Tim Quinlan, an economist at Wells Fargo.
Quinlan says the price of gasoline is one of the three big drivers of consumer confidence, along with stock prices and the unemployment rate. “Lately all three are moving in the right direction,” he says.
After falling for 49 straight days, the average gasoline price in the U.S. Thursday is $2.92, the lowest since December of 2010, according to AAA. That was also the last full year when the average came in below $3 a gallon.
While it’s not unusual for gas to hit its low for the year in late fall, the government is now saying that these prices aren’t just a low point, but instead will be the norm next year.