Gas prices dropping, but reason may signify problem

Posted September 30, 2011

— The average price of gas has fallen 20 cents in Raleigh over the past month, and prices are dropping other places as well. Although spending less on fuel sounds like a good thing, the reason for the cheaper prices might signify a problem.

Bill Summerlin drives all the over the state and said $3.29 a gallon at an Exxon station on Aversboro Road in Garner is the cheapest he has seen lately.

“It's hard when you've got $3.50, $3.60 a gallon. It's hard to put gas in the car to do what you've got to do for everyday life,” he said.

Driver Marree Mabine said she hopes the prices don’t go up.

“Whoever’s doing it, I really appreciate it,” she said.

AAA Carolinas spokeswoman Jodi Woolard says gas prices are dropping because people are worried about the economy – and not just in the U.S. Problems in Europe are having a big impact as well.

“As long as there continues to be unrest and uncertainty over there, we'll see the cost of a barrel of oil drop, which means lower prices at the gas pump,” Woolard said.

Gas prices drop, but reason may signify problem Gas prices drop, but reason may signify problem

Raleigh’s average price of gas went from $3.64 at the beginning of September to $3.44 at the end of the month. Some analysts predict that prices will drop below $3 a gallon in the next few months, which has already happened in Oklahoma.

Summerlin says he'll believe it when he sees it.

“I doubt it will go below $3 a gallon ever again,” he said. “(But) we can always hope.”


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  • oldschool101 Sep 30, 2011

    You are right "all the people". The money being spent on gas is circulating ...but what you may not realize, or just don't want to admit is that it's all within the hands of the gas companies and their affiliates. Spending it in other places for change might not help a lot...but it sure couldn't hurt! I say let's try it and see!

  • Rebelyell55 Sep 30, 2011

    But what you are not accounting for is the fact that the money which we are spending on gas is then just being spent by the companies so the money is still being spent in the economy just in different places than you mentioned.
    All the People
    September 30, 2011 6:37 p.m.
    Ignore Report abuse
    I sorry to say, you not really correct in that statement. The money does not out into the economy that way. Most is saved for long term investment or stored overseas in funds to prevent high US taxes.
    Oil prices while having some effect is not nearly as major as it once was. Remember oil prices has dropped drasticly, while gas prices have remain very high. Other product that use oil, is not near the rate of increase that gas is...

  • wasplarva Sep 30, 2011

    Also keep in mind that the Saudis, who are our largest supplier of oil, will set their oil prices at a level that is based on revenue their indebted government needs, not on true market value.

  • wasplarva Sep 30, 2011

    There's more to gas prices than the value of our currency. I agree with boneymaroney that oil speculation does play a part. Hedge funds and even banks will buy up huge amounts of oil in order to squeeze the supply. Another cause of high oil prices is OPEC. Disputes between countries within OPEC causes gas prices to fluctuate radically from low to high. Leading up to the first invasion of Iraq, Kuwait tried to undercut Saddam's oil profits by flooding the markets with large volumes of oil. This, obviously results in lower gas prices for consumers, but less money for the oil producing nation which in turn tries to regain that profit by squeezing the market and resulting in higher prices. Saudi Arabia did it in the 90's to Venezuela.

  • mmtlash Sep 30, 2011

    I recall hearing a while back that ever since Katrina, in an effort from keeping gas prices from falling to the pre Katrina days (ie $1-$2/gallon) oil companies tend to cut down on the supply to help "stabilize" the help keep their profits high...

  • storchheim Sep 30, 2011

    Maybe there's a drop in demand because people don't have jobs to drive to any more. OK, I know that's not true.

    But those who are saying that a .10 or .15 drop will improve the economy must drive one heckuva lot. I think the only thing that will improve the economy is a steady, ample supply of decent jobs that pay a living wage. I'm out of work and watch every penny I spend, whereas before I didn't think twice about spending well - not stupidly or lavishly, but well - for myself and those I love. Tip the waitstaff and hairdresser very nicely, round the check upwards for the contractors. The saddest part of having no income is being unable to spread it around any more.

    Anyway...saving $1.20 to 1.80 a tank is a drop in the bucket.

  • All the People Sep 30, 2011

    "So "Allthepeople" which I don't think you represent even a 10th of the people. You are saying that suppliers will cut off our supply if we cap, or simply refuse to purchase leading to shortage. So you are saying we should continue to pay what they want?"

    First of all I would be against a cap because there are many examples where caping the price of gas leads to shortages, and inefficient distributions of the resource. If prices were capped then suppliers would reduce their production. The current prices are simply a reflection of how much you are willing to pay for gas, if you didn't feel that it was worth it than you would not purchase it, so yes we should and will continue to pay their prices so long as we have a need for their good.

  • All the People Sep 30, 2011

    "Ways that lower gas prices could help the economy: People start feeling like they have a little extra cash again, have a better outlook. They start spending...home improvements, furniture, clothing, cars, etc. As things pick up, stores & other places can start hiring again, maybe giving raises. It goes from there. High gas prices are at the root of what is wrong with the economy today!"mholt

    But what you are not accounting for is the fact that the money which we are spending on gas is then just being spent by the companies so the money is still being spent in the economy just in different places than you mentioned.

  • boneymaroney13 Sep 30, 2011

    HOGWASH - HOGWASH - HOGWASH! Arrest the speculators and let the supply side take care of the prices.

  • flashsparks Sep 30, 2011

    Summerlin says he'll believe it when he sees it.