Enjoy It While It Lasts: Gas Prices Continue to Slide but May Bottom Out Soon

By Jesse Sokolow on 17 February 2016
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DSC_9472The average price of a gallon of gasoline in the United States continues to slide and is just under $1.70 according to figures released by the AAA.

The $1.70 figure represents a 19-cent drop from one month ago.

One Frequent Business Traveler reader reported paying $1.59 at the Exxon station in Weehawken, New Jersey and one staff member said he paid $1.97 (with credit card) at a Gulf Station in Queens.

The gravy train in gas prices may not, however, last much longer as oil refiners in some states have already begun to cut back production. In Ohio, the AAA reported an average price per gallon of $1.55, an increase of approximately seven cents over last week’s price.

In Los Angeles County, the average price of a gallon of gasoline dropped to its lowest level in over a year, decreasing 1.4 cents to $2.516, according to figures from the AAA, which said that the average price in the state has dropped 40 out of the past 41 days, decreasing a total of 55.9 cents over the period.

Adjusted for inflation, the price we pay at the pump today is far less than what people were paying in 1970, several years before the Arab Oil Embargo. Back then, a gallon of gasoline cost $0.36 that, in today’s dollars, is $2.20. What is perhaps more remarkable is that the current price of $1.70 is less than half of the average national price from 2011, 2012, and 2013.

One downside from lower fuel prices has been a drop in motor fuel tax receipts in multiple states. Officials in Kentucky have put multiple roadwork projects on hold due to a drop in its road fund, which the motor fuel tax is a significant contributor to.

(Photo: Accura Media Group)