Raleigh, N.C. — 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.