Oil prices plunge; Where's relief at the pump?

To state the obvious for most Americans: gas prices are rising by the day.

On Thursday, they reached a national average of $3.99 per gallon. They last hit that price in the summer of 2008, on their way to a record high of $4.11 per gallon.

CBS News correspondent Anthony Mason reports that relief may be just down the road, as oil plunged more than $9 per barrel today to close below $100. While the 9 percent drop is significant, the damage has been done.

"We are spending about $1.5 billion a day just to fuel up our cars these days. In typical years it's been well under a billion," said Tom Kloza with Oil Price Information Service.

Since January, gas on average is up more than 90 cents per gallon, that's a 30 percent increase.

"Every time the price of diesel goes up, I cringe a little bit because I do know the impact is going to be tremendous on us," said Ron Kish, captain of a New Jersey party boat.

Kish said he will hire fewer crew this season, because gas prices are driving away the weekend fishermen. He needs more customers to pay for his boat's 400-gallon fill ups.

"Instead of carrying just 12 people to pay for the fuel, we might have to carry 15, or 16!" Kish said.

On average, Americans are now spending nearly 9 percent of their income on gas, double what they paid two years ago.

Treasury Secretary Timothy Geithner said rising gas prices "directly hit the pockets books of Americans. It will slow growth. It means we'll have more headwinds as we recover."

Americans are driving less. Gas purchases have dropped for six straight weeks. Concerns about a slowing economy helped drive oil back below $100 per barrel Thursday. Some analysts believe prices have now peaked.


"We back off about 50 cents, spend the summer there. And I think the economy does okay with gasoline at $3.75 or lower," analyst Kloza said.

After 44 straight days of rising prices, the oil prices rally may have finally run out of gas.

  • Anthony Mason

    CBS News senior business and economics correspondent; Co-host, "CBS This Morning: Saturday"