Emily Darrin was late for class as she hurriedly stared at the gas pump and watched as the $10 that she prepaid rolled across the digital screen.
$1. $2. $3.
It was blazingly fast for a college student to see her money disappear, but instead of a pained look Darrin had a wide smiled.
“Anything that gets me around further than what I was paying I’m happy about,” she said, pointing at her aging Honda Accord behind her. “It does well, but a few dollars here and there make a difference when I’m going back and forth to Modesto every day.
“That $10 goes a lot further than it used to. And that’s a good thing.”
According to AAA – which conducts gas surveys during peak holiday times as a way to warn drivers about what they’ll experience when they’re on the open road – this week motorists across the state experienced a double digit drop in the price of an gallon of regular unleaded for the second time in as weeks. The statewide average fell to $3.21-a-gallon, and according to a survey done by The Bulletin on Thursday, those prices continue to fall as every gas station in town offered rates even lower than that.
Typically the Thanksgiving weekend is the most heavily traveled of the year as people drive to visit relatives and start the holiday season – jamming freeways on the night before the weekend is to commence and packing airports for flights.
“Absent of any unanticipated market-moving events this winter, the retail price for gasoline is expected to remain relatively low,” said Cynthia Harris, AAANorthern California spokesperson. “As consumers adjust to falling oil prices, California motorists can enjoy some of the lowest prices during a holiday season since 2009.”
According to AAA, the national price of gas has dropped consistently for 46 days in a row, a cumulative decline which is longest consecutive decline since 2008. The national average for regular unleaded gasoline is $2.93 per gallon, which is the lowest since Dec. 4, 2010.
And Manteca appears to be below that mark – a rarity in California.
On Thursday afternoon gas prices at Costco were hovering at $2.89 a gallon – the lowest price in Manteca, Lathrop and Ripon. There were six gas stations selling below the $3 dollar-a-gallon mark that seemed to some, like Kyle Rawley, to be ancient.
“I remember when I started driving I was paying 99-cents-a-gallon so when it started going up like that, it was insane to me. Now, it is what it is. You get used to paying a certain amount of money for gas. Now I’ve got a family and a big SUV so when I pull up to the pump and I see this it’s nice – it’s not quite where it once was, but it’s a happy medium. I’ll take it.”
And those low gas prices on station signs aren’t going away soon, the government says.
In a dramatic shift from previous forecasts, the Energy Department predicted Wednesday that the average price of gasoline in the U.S. will be $2.94 a gallon in 2015. That is a 44-cent drop from an outlook issued just a month ago.
If the sharply lower estimate holds true, U.S. consumers will save $61 billion on gas compared with this year.
Rising oil production, particularly in the U.S., and weak spots in the global economy have led to a sharp reduction in oil prices over the past four months. Not seeing much of a change ahead, the government cut its forecast for global oil prices next year by $18 a barrel to $83.
As a result, U.S. drivers will pay on average 45 cents less for a gallon of gas next year compared to this year. Based on expected gasoline consumption, that’s a savings of $60.9 billion.
That may not seem like a lot in the context of a $17.5 trillion U.S. economy, but economists say it matters because it immediately gives consumers more money to spend on other things. Consumer spending accounts for 70 percent of the U.S. economy.
“It would be a reversal of the trend over the last few years where consumers can’t stretch a dollar far enough,” says Tim Quinlan, an economist at Wells Fargo.
Quinlan says the price of gasoline is one of the three big drivers of consumer confidence, along with stock prices and the unemployment rate. “Lately all three are moving in the right direction,” he says.
After falling for 49 straight days, the average gasoline price in the U.S. Thursday is $2.92, the lowest since December of 2010, according to AAA. That was also the last full year when the average came in below $3 a gallon.
California, however, is excepted to see a 15 cent a gallon bump in gas prices after Jan. 1 when oil refineries are forced to pay greenhouse emission taxes that they will pass on to consumers. As 2020 nears, that hidden tax per gallon of gas could climb as high as 80 cents a gallon according to economists.