Drop in Gas Price = $300B Savings

 

The cheapest gas in the country can be found in Kansas City for as low as $1.39 per gallon, and the average retail price for gas is now down to $1.98 per gallon. Without the high-priced states of Alaska ($2.95) and Hawaii ($2.89), the national average for the other 48 states is down to $1.94 per gallon.

Using real gas prices from the EIA (in November 2008 dollars), the chart above (click to enlarge) shows how today's gas prices compare to past prices.

The last time real gas prices (national average) were as low as $1.98 per gallon was almost five years ago in February of 2004, and the last time real gas prices (national average) were as low as $1.39 per gallon (current Kansas City low price) was almost seven years ago in February of 2002 (see chart above). Gas prices in Kansas City are within 18 cents per gallon of the lowest-ever real gas price of $1.21 per gallon in February of 1999.

The drop in gas prices from $4.12 in July to the current $2.07 per gallon will generate annual savings of more than $300 billion for American consumers and businesses (each $1 fall in gas prices = $142 approximately billion annual savings). Talk about a mustard seed!

Comments

[aarc:]

Great! $300B saved.

Meanwhile, $25 trillion of capital investment into the stock markets is besically already been destroyed with more to go by H2 2009.

2008 Nov 21 03:12 PM

[aarc:]

$12T as of today for the USA.


On Nov 21 03:12 PM aarc wrote:

> Great! $300B saved.
>
> Meanwhile, $25 trillion of capital investment into the stock markets
> is besically already been destroyed with more to go by H2 2009.<br/>

2008 Nov 21 03:30 PM

[jcrash:]

My wife is a pharmaceutical Rep. In July, her company doubled the amount they charge the employees for their company cars due to the high cost of gas.

At present, there are no plans to revoke the increase.

So, it ain't all sunshine and roses.

2008 Nov 21 08:22 PM

[UncleFrank:]

Mark,

How can this be? Don't the evil oil companies conspire to keep prices high? Could it be that once again our friends in Congress lied to us about supposed price gouging? Tell me it isn't true, tell me that free markets don't really work.

Your pal, Uncle Frank

2008 Nov 22 08:13 AM

[Perki:]

jcrash,

I think the IRS sets the mileage rate for employee personal use. So don't hate the Pharma Co too much.

The IRS increased it, along with the business mileage deduction rate in June, for July through December. perrygambrell.com/news...

2008 Nov 22 08:17 AM

[jepittman:]

If these prices hold near their current levels and you add a $500 billion fiscal stimulous and then tack on dramatically lower cost of funds to banks and consumers then the recession may well be shallower than the consensus is expecting. It appears to me that the stock and bond markets have been pricing in a high probability of a worst case scenario which may not occur.

2008 Nov 22 09:45 AM

[Jack B.:]

UncleFrank,

You are so correct. I am suprised that the public is not outraged about these Ilegal Big Oil Companies tactics. I am sure when a fly sneezes at one of their refinery's we will all of the sudden go back up to $3.80 a gallon within a week. They are already plotting on this move. Afterall they have been raping us since 1974 and they are the real cause of this massive depression. I hope that I am wrong,but I dont think so......


On Nov 22 08:13 AM UncleFrank wrote:

> Mark,
>
> How can this be? Don't the evil oil companies conspire to keep prices
> high? Could it be that once again our friends in Congress lied to
> us about supposed price gouging? Tell me it isn't true, tell me that
> free markets don't really work.
>
> Your pal, Uncle Frank

2008 Nov 22 12:19 PM

[derwent:]

I hope this does not mean Americans' will continue with there gas guzzling ways oblivious to the fact that they consume 25% of the worlds' energy. GM and Ford should concentrate on building hydrogen cars and hybrids and then maybe there's hope for the rest of us. Biofuels are not the answer if you take the food out of the mouths of Latin American nations or even your own for that matter. In the UK our indigenous car industry was wiped out years ago but runs quite successful factories by Honda and Toyota. Of course there is also the nonsense the US manufacturers pay $79 an hour. are they worth that???
However get the Citi bull resolved, rethink banking legislation and I believe success is not too far away. Ditch the Hummer, tax the gas guzzlers off the road and at least in the short term try to drive efficiently.

2008 Nov 23 08:34 AM

[wind4me:]

Corn and Grains went up, Gas went up.......stock prices went UP

Today, Grains and Gas going down.........stocks going down.........moral of story, pray for higher gas prices if you own stocks???? Low gas prices killing solar and wind stocks

2008 Nov 23 11:27 AM

[y3115y:]

You did not save 300-billion, you are just luck so you did not lose another 300-biilion in a few months.

There is leakage in you home heating gas line, you lost $100.00 for gas this month. You repaired your gas line, so you don't have to lose another $100.00 next month. Did you get a new income of $100.00? You should be smart enough to figure this one out.

2008 Nov 23 04:08 PM