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Gas prices at 5-year low
As the New Year begins, California gas prices continue to take a dive. As of Tuesday, AAA Northern California reports state gas prices are registering at $ 2.58 on average for a gallon of regular unleaded gasoline - a price not seen since 2009. The highest recorded price ever registered in California was in October 2012, at $4.67 a gallon for unleaded regular.
The least expensive average price in Northern California can be found in Marysville, where regular unleaded gasoline is $2.31 per gallon. Of all metro areas tracked by AAA in Northern California, Yreka continues to register the highest price at $2.87 per gallon of unleaded regular. Three stations in Oakhurst (Yosemite Gas, Valero, EZ Mart) were at $2.49 earlier this week.
Tuesday’s national average is $2.12 per gallon and the average price for regular unleaded gasoline continues to test lows not seen since May 2009.
“The dramatic slide in retail gas prices has been driven by a similar plummet in global crude oil prices since the end of the summer of 2014,” said Cynthia Harris, AAA Northern California spokesperson. “This decline in the price of oil has been a product of weak demand combined with abundant supply.”
Harris said prices are still going down and it’s hard to predict when they will bottom out.
Harris said that while lower gas prices are certainly a welcome relief for consumers, the broad impact of sustained low oil prices are front of mind for many associated with the oil industry. In countries like the United States where the cost of oil extraction is more expensive, producers may be forced to reassess their plans to factor in profit margins that are sharply lower or even reversed as markets continue to register multi-year lows.
The global price of crude has lost more than half its value since mid-2014. OPEC has reiterated that it will not intervene in the market to force prices higher and plans to sustain its current production levels, with the earliest possibility for supply reductions reportedly pushed to their next meeting scheduled for June. Sustained low prices for crude can also potentially influence the way global markets are assessed.
But late January and February are expected to bring an increase in prices due to the state’s landmark greenhouse-gas emissions law. The law makes gasoline producers subject to the state’s cap-and-trade system, forcing them either to supply lower-carbon fuels - which are more expensive to produce - or to buy pollution permits for the greenhouse gases created when fuel. Oil industry leaders say the law will raise prices 15 to 75 cents per gallon.
“Although the emissions law went into affect Jan. 1, we have not seen any increases passed on to consumers at the pumps,” Harris said. “There is a lot of speculation within the oil industry, but we expect to see some increases in the coming weeks.”
Harris feels with prices currently so low, any tax increase will not be as significant to consumers.
While gas prices have plummeted nearly 90 cents a gallon from a year ago, diesel prices have only dropped about 60 cents a gallon, with the national average currently at $3.28 a gallon. In Oakhurst, Yosemite Gas and Valero had diesel at $2.99 per gallon earlier this week.
To get the best mileage possible, AAA recommends keeping tires at the recommended pressure suggested by the vehicle manufacturer, performing routine maintenance and making sure fluids are clean and belts and hoses are in good repair. The way you drive can also impact fuel economy. Smooth driving to avoid sudden stops and starts, combining trips and lightening a vehicle’s load also help to conserve gasoline.
AAA Fuel Gauge Report is the most comprehensive retail gasoline survey available, with over 100,000 self-serve stations surveyed every day, nationwide.
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