Monday, February 1, 2010

Lower Gasoline Prices Vary Widely Across US

The two-week drop in oil prices is paying off for drivers in some parts of the country more than others.

Retail gasoline prices have now fallen for 19 straight days to a national average of $2.669 per gallon. State averages are 10 to 15 cents lower a gallon in many parts of the Midwest and South, and locally prices may as low as $2.25 per gallon, said Tom Kloza of the Oil Price Information Service.

Different tax rates from state to state are part of the reason for a wide range of prices. Wholesale prices also can vary considerably throughout the country, with prices at $1.86 per gallon in Chicago and $2.01 per gallon in Los Angeles Monday afternoon, Kloza said.

Midwest fuel prices tend to be cheap in the winter because the weather usually leads to low demand, he said. Prices are also held down by gasoline blends that have cheaper components during the winter. Higher gas inventories than last year, low-cost ethanol and retailers operating either at thin or break-even margins also keep prices lower.

At the pump, a gallon of regular sold for $2.398 on Monday in the Kansas City, Mo., area and $2.433 in Tulsa, Okla. But the price was $2.706 in Boston and $2.633 in Phoenix, according to auto club AAA, Wright Express and OPIS.

Average retail prices in California, typically among the highest in the country, also have broken below $3 a gallon.

After falling 0.5 cents overnight, the national average was down 8.53 cents from the 15-month peak of $2.7543 a gallon reached on Jan. 14, according to AAA, Wright Express and OPIS.

Prices have dropped 4 cents a gallon in the past week, but are still a penny above levels of a month ago. Prices are 80.2 cents higher than a year ago.

Kloza said prices could fall another nickel or dime per gallon before hitting bottom for the winter.

The Energy Information Administration on Monday reported a similar drop in gasoline prices over the past week. It said prices fell 4.4 cents to a national average of $2.661 per gallon with the lowest price of $2.541 a gallon in the Gulf of Mexico region.

After trading lower since hitting a 15-month high last month, oil prices headed back toward $75 per barrel Monday.

Analysts blamed the jump on a variety of factors, including attacks on an oil pipeline in Nigeria, persistently cold weather in the Northeast and a stronger stock market.

From the Wall Street Journal; Oil Price Information Service; The Commerce Dept.

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