Americans feeling less pain at the pump
(MoneyWatch) The downward trend in gas prices is expected to continue. The current national average for gas is just under $3.39 a gallon and falling, said Tom Kloza of GasBuddy.com, which tracks prices at pump.
"My best sense is that we'll match, or dip below, the 2012 lows for U.S. gasoline prices, which would push average prices to $3.21 gal or less. The more expensive markets will be the U.S. West Coast as well as New England. The cheapest markets may be the upper Midwest, the Southeast and the Great Plains."
Kloza said demand for gasoline has dipped, coming off highs in July and August, when for the first time in several summers more Americans hit the road. Prices per gallon just a month ago in part reflected that greater demand, at an average $3.61 a gallon.
Overall, the trend is downward. A year ago, filling up your tank cost an average of $3.79 a gallon.
That trend is influencing the American consumer. Transportation expert Michael Sivak of the University of Michigan tracks buying habits to see which new cars are being snapped up and how fuel efficient they are. He said that as gas prices declined over the last year, more Americans bought less fuel-efficient cars.
"People tend to buy less fuel-efficient vehicles when gas prices go down, and vice versa," Sivak said.
Moving forward, Kloza said there are other variables that could further influence the price of gasoline. "The ongoing saga of the partial government shutdown, as well as worries about the debt ceiling showdown are factors that could inhibit demand further."
He also said that it is important to watch the current price of ethanol. Almost all of the unleaded gas sold in the U.S. these days is about 10 percent ethanol. The price of ethanol has dipped some 50 to 80 cents a gallon in recent weeks. If ethanol prices continue to fall, gas prices also could be affected, Kloza said.