Experts eye gas prices under $3 per gallon soon

by Cornelius Nunev

Gasoline prices in our recessionary age keep making customers see red, such is the cost of operating the internal combustion motors that spin the wheels of business and leisure. However, experts are now forecasting that an economic respite is headed our way. The Detroit Free Press reports that fuel costs will likely drop below $3 per gallon by the start of fall 2012.

Pretty great news

In April 2012, fuel prices boomed above $4 per gallon in some states. That means a lot of people are pretty excited to hear the good news. A lot of people in the U.S. have already seen the reality of lower costs.

"It is going to become a national trend very soon, because oil has dropped below $80 a barrel," said Oil Price Information Service executive director Denton Cinquegrana. "All things being equal, and we don't see anything major happening over the next couple weeks, I wouldn't be surprised to see prices drop even more."

Cost throughout the nation

Considering the present average fuel price per gallon, it may very well take a few months before gasoline price hit sub-$3 per gallon amounts. As of Friday, the national average was $3.45, two cents lower than the previous day, and 22 lower than the May average, according to the AAA Daily Fuel Gauge Report. Last year at this time, the average national price for gasoline was $3.62 per gallon. In the "Motor City" of Detroit, the average fuel price was $3.64 per gallon this past Friday, three cents lower than Thursday and 20 cents lower than the previous week's high.

Sort of like a tax break

Why is the price of gasoline on the drop? According to Cinquegrana, turmoil in the Middle East has lessened somewhat of late, oil refineries have completed the changeover to summer blends and other refinery maintenance projects are also complete. In addition, economic upheaval in Europe and China has deflected investor tension away from the oil industry, at least to some extent.

"You have a little bit of a double-edged sword," said Cinquegrana. "Lower gas prices are good for Main Street. It is like your own little tax break."

Many expect more than that

Wall Street pundits point out that the projected drop in fuel costs below $3 per gallon is not an indication that the United States economy is on the right track. Weaker demand leads to drops in oil and commodity costs, which stems from lack of consumer confidence. Gasoline retailers, however, are happy to take advantage of the chance to sell more.

"As retailers, yeah, we'd like it lower," said Ed Weglarz of the Associated Food & Petroleum Dealers.

By selling more, nonetheless, Weglarz doesn't necessarily mean more gasoline. Retail arrangements net the same few cents per gallon for retailers, but the money customers save is much more likely to be spent on concessions, car washes and other items.

Getting gas lower

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