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Will gas fall below $1 a gallon?

Posted December 9, 2008
Updated December 10, 2008

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— Oil prices have hit four-year lows, and the decline is so big and so fast that it is raising the prospect that gasoline prices could hit $1 a gallon.

Finding a simple explanation for why gas prices dropped so quickly is difficult. Two factors are that global consumption is down and the credit crisis has pushed many speculators out of the market. The bottom line is that lower gas prices are a sign of economic decline.

It was September when most North Carolina gas stations charged well over $4 a gallon. But these days, fill-ups for Randy Mason's salvage truck cost him $60 dollars instead of over $100.

“It's been a blessing," Mason said.

Taxi driver Adil Marwane says his profits are up, but he is suspicious that the big oil companies are manipulating the prices.

“Not this much, in this short of time,” Marwane said of the price drop.

"It is awesome to be able to fill up my tank for $20,” driver Carolyn Walker said.

At a station in Zebulon, gas was $1.32 a gallon Tuesday.

Carlos Wheeler sells cars in Zebulon. While sales are down 17 percent this year, low fuel prices are turning things around, he says. With people driving more, the vehicle maintenance and collision business is up. People are also taking another look at the bigger trucks on the lot.

“Pickups, SUV's, large vehicles – it is just much more affordable,” Wheeler said.

The price of gas has fallen for 83 consecutive days and is more than $2 a gallon cheaper since hitting a national average record high of $4.114 on July 17, according to AAA Carolinas.

Wake Tech economics instructor Dr. Kelly Markson says that while global demand for gas is down, prices are also directly influenced by market speculators.

“There's expectations about what's going to happen in the future, and people are expecting that the economy is going to slow down. And so that is reflective in today's price,” Markson said.

An economist and professor at North Carolina State University says gas prices could go even lower.

"I would not be surprised to see gas go under, for some period of time, a dollar a gallon,” Mike Walden said.

However, this is a problem, Walden says. As gas gets cheaper, the push toward more fuel efficient, greener technology takes a back seat.

But for people just trying to get by, cheaper gas is a big help.

"It sure enough helped me out being unemployed,” Michael Todd said.

Walden says that in the future, there may be a need for the federal government to use taxes to keep gas prices more steady instead of allowing the wild fluctuations that have happened this year.

67 Comments

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  • TheAdmiral Dec 10, 2008

    We should be happy that change has come. Now there is a ijiot who said he wants to tax gas at $1.00 a gallon to penalize people.

    This is what caused the Boston Tea Party. If they are abusing the tax system like this, it is time to have another one.

  • ifcdirector Dec 10, 2008

    "Walden says that in the future, there may be a need for the federal government to use taxes to keep gas prices more steady instead of allowing the wild fluctuations that have happened this year."

    Don't worry. Obama and the Socialist Democrat Congress will get their share of the difference out of your wallets soon enough. Enjoy it while it lasts comrades.

  • kittiboo Dec 10, 2008

    dcatz- I don't know WHAT you consider to be bad mileage, but I get about 47 MPG in my Prius, and I actually do better when I drive more on the highway because I tend to make short trips, which lowers my MPG to about 45. I drive, if anything, above the speed limit most of the time. Quit believing what YOU want to believe.

  • muttley - back by popular demand Dec 10, 2008

    Yes, Allah wiiling. With Obama at the helm, all is possible. America's best days are ahead.

  • All child molesters should die Dec 10, 2008

    TarheelsDontLikeEdwards,

    You do have a very good point: Never say never! I just think it's highly unlikely and would say I am 99.99% it will never fall below $1 a galllon.

    For all we know, gas could one day be .25 a gallon. Never say never. :-)

    Beth

  • 68_polara Dec 10, 2008

    "Hey guys it's simple lil' Bush is leaving office therefore, gas prices are falling as quickly as they rose go figure. Those CEO's now have billions of dollars to fall back on, it's a conspiracy."

    That bunch of baloney is even worth a response.

  • 68_polara Dec 10, 2008

    "Will gas fall below $1 a gallon?"

    Hope not I would much rather have some stability but doing it with taxes just makes high gas prices hurt that much more when they do return. And when the high prices return maybe we'll wish we were able to buy it for 4 bucks a gallon.

  • 007KnightRider Dec 10, 2008

    Hey guys it's simple lil' Bush is leaving office therefore, gas prices are falling as quickly as they rose go figure. Those CEO's now have billions of dollars to fall back on, it's a conspiracy.

  • WRALblows Dec 10, 2008

    "The oil industry freaked when Bush offered to increase the supply portion of the equation causing the price and future prices to go down." - TarheelsDontLikeEdwards

    And this is the reason you perceive oil prices fell. Okay, think that. What you don't know won't hurt you.

    BTW - I grew up in NC and I like Edwards. Blanket statements will usually expose a vulnerability or weakpoint.

  • DontLikeTheSocialistObama Dec 10, 2008

    "No. Gas will never, ever fall below $1 a gallon. Nice thought, though.

    Beth"

    Never say never. Last summer we thought gas would never go below $3 and most likely go to $5 by the end of the summer before the prices crashed after Bush lifted the executive order on offshore drilling.

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