Fuel prices haven't been this low in years, saving drivers hundreds of millions of dollars per day.
That weekend road trip is starting to look pretty affordable.
For the first time in nearly four years, the national average price of gas is set to drop below $3.00 per gallon, according to American Automobile Association. At that rate, the AAA estimates the lower prices are helping consumers save $250 million per day compared to the days of summer when prices averaged a hefty $3.68 per gallon.
“Consumers are experiencing ‘sticker delight’ as gas prices unexpectedly drop below $3.00 in much of the country,” said Bob Darbelnet, CEO of AAA. “Lower gas prices are a boon to the economy just in time for holiday travel and shopping.”
The fall in prices, according to the AAA, ends a streak of 1,409 days in which prices remained above $3 per gallon, averaging $3.52 per gallon and as high as $3.98 per gallon during that 46-month period. Prices on Friday averaged $3 per gallon, down 6 cents from a week ago.
Prices – which vary by region depending on the taxes imposed – have already dropped below $3 in 60% of all U.S. stations with at least one in every state offering cheaper fuel, the AAA said.
“It has certainly been a long time coming – the decline in gas prices has lasted basically since late June, and could continue even further if oil prices can break through and close under” $79 per barrel, according to a blog post by Patrick DeHaan, a senior petroleum analyst with GasBuddy.com, which found 35 states have already hit new lows in prices for 2014 and that 21 now feature prices under $3.
Cheaper gas prices are mostly the result of oil prices, which has fallen dramatically the past few months.
Concerns about oversupply in the markets are driving the decline. Brent – the global benchmark – sank to its lowest level since November 2010 earlier this month at $83.47 a barrel. Some of the decline is due to supply glut driven by increased American production, but also from more pumping in Libya and Iraq.
Prices have recovered slightly and Brent was trading Friday at $85.01 a barrel, down $1.23 or 1.4%.
This week, the U.S. Energy Information Administration had predicted that prices would fall below $3 soon.
The AAA predicted lower prices should carry through the holidays because of lower demand and typical seasonal trends. However, prices may begin to creep up in the spring from refinery maintenance, increased demand and a return to a more expensive blend of gasoline used in the summer.
“Paying less than $3 for gas is a welcome holiday gift that may not last nearly as long as many would hope,” Darbelnet said. “It is possible that lower gas prices will soon be a faded memory, so enjoy it while you can. The days of paying more than $3 per gallon for gas have regrettably not gone away.”