The sharp drop in the Midwest resulted from the oil industry overcompensating in an attempt to bring price relief to that part of the country, analyst Trilby Lundberg said Sunday.
Nationwide, prices at the pump continued to decline from their highs in early June. The average price of a gallon of gas was $1.60 Friday, down from $1.66 during the last survey two weeks before, according to the Lundberg Survey of 10,000 stations.
In Chicago, which had the highest prices in the country in June, the cost of a gallon of gas is now just 1 cent over the nationwide average, even figuring in the city's higher-than-average taxes, Lundberg said.
Gas prices there have plummeted 55 cents a gallon since early last month.
"The shortage in the Midwest due to the rollout of a new anti-smog formula on June 1 is over," Lundberg said. "It was a frenzied rush by the oil industry to bring supply relief."
The rest of the country saw less dramatic price declines over the past two weeks.
Retail prices on the West Coast fell one-tenth of a cent to $1.67 a gallon. In the Rockies, the average cost declined 2.8 cents, to $1.58. In the South, the average drop was 2.5 cents, to $1.52.
On the East Coast, prices fell 2.2 cents a gallon to $1.58. And in the Midwest, the price drop of 17.2 cents a gallon resulted in an average price of $1.47.
The price of crude oil was also down Friday. If it stays that way, Lundberg said, gas prices could fall still more as the summer driving season continues.
The highest prices in the nation were in the San Francisco Bay Area, where the average price for a gallon of regular was $1.86. The lowest average price was $1.31 a gallon in Indianapolis.
The national average price of gasoline, including taxes, at self-serve pumps Friday was $1.56 for regular unleaded, $1.65 for midgrade and $1.74 for premium. At full-service pumps, the average was $1.89 for regular unleaded, $1.98 for midgrade and $2.06 for premium.