Declining Gas Prices Pump Up A Shaky Economy The federal shutdown had economists worried, but consumers have had something to smile about. Gasoline prices are the lowest in three years — under $3 a gallon in some places. Analysts credit greater supplies, lower demand, the easing of Middle East tensions and even a slow hurricane season.

Declining Gas Prices Pump Up A Shaky Economy

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Economists have been focused on the negative impact of the government shutdown and potential debt crisis. But away from Capitol Hill the economy has been getting one big boost: gasoline prices have been dropping. In some places, a gallon of regular gas is now below $3, a price most Americans haven't seen in three years.

Matt Trotter, of member station KWGS, reports.


MATT TROTTER, BYLINE: Almost everywhere you look in Tulsa, gas is $2.99 a gallon. users even report a West Tulsa station selling regular for $2.85.

MIKE THORNBRUGH: When it falls, everyone has a smile on their face. And when it goes up, nobody is happy.

TROTTER: That's Mike Thornbrugh, spokesman for QuikTrip. The company is headquartered in Tulsa and operates more than 600 gas stations across the southern half of the United States, from Arizona to North Carolina. AAA reports the average price nationwide for a gallon of regular gas is $3.35 down 17 cents from a month ago.

Thornbrugh attributes part of the drop in prices to the season.

You've had a switchover from what we call summer gasoline to winter gasoline, a huge difference in price historically.

But there are other, stronger forces acting on the market right now. Chuck Mai with AAA Oklahoma focuses on what's not happening.

CHUCK MAI: Nothing's happening in the Middle East - tensions seem to have cooled there - and no hurricanes threatening the Gulf. So everything looks good for continued lower prices.

TROTTER: Mai says there are other factors too. More fuel-efficient cars on the road, people driving fewer miles and using less gas because they're taking better care of their cars. Oklahoma drivers have seen a particularly sharp drop. Gas prices have fallen 38 cents since early September here; more than double the national average. Mai says there are a few reasons Oklahoma is typically among the five cheapest states for gas.

MAI: One, we have a very low state sales tax on gallons of gasoline.

TROTTER: Data from the nonpartisan Tax Foundation show the average state tax on a gallon of gas is 27 cents. You pay that on top of the costs to produce the gas and get it to the pump. California, which has the nation's highest gas prices right now, has a 49 cent tax. Oklahoma's tax: 17 cents.

And you've probably heard the adage location, location, location in real estate, but it applies to gas prices, too. Mai says Oklahoma is in a sweet spot.

MAI: We have refineries here in Tulsa. We have others across the State of Oklahoma. And we're close to the Gulf Coast refineries, as well. So transportation costs being low, and the state sales tax on gas being low, as well, help to keep our prices low.

TROTTER: Tulsa sits a mere 50 miles away from Cushing, Oklahoma, which calls itself the Pipeline Crossroads of the World, and not without good reason. Eight companies, including Valero, Sunoco, Enbridge, and Magellan Midstream operate pipelines in the area. And the town is a major trans-shipment point, connecting Gulf Coast suppliers with northern consumers. It also stores a huge amount of oil, somewhere between 5 and 10 percent of the total U.S. crude inventory.

Many economists are predicting gas prices will move lower over the next few months. But all bets are off if anything disrupts fuel supplies nationwide, say, a storm taking refineries offline or tensions flaring in the Middle East. Tulsa's gas prices may be among the nation's lowest, but even they can't get away from those kinds of market forces.

For NPR News in Tulsa, I'm Matt Trotter.


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