Prices drop for 40 straight days

The price of filling up at the pump is dropping about as fast as leaves are falling off trees, but can sub-$2 per gallon gas last?

The West Main Street corridor in Waynesboro has several gas stations under $2 for regular unleaded, including Raceway and Hess at $1.92 and Sheetz at $1.93. In Staunton, the cheapest gas, as of Wednesday afternoon, is $1.99, found at several locations, according to GasBuddy.com.

Nationally, the price of gas is averaging $2.37, down from $3.50 a month ago. Des Moines, Iowa, has the lowest average gas prices, at $1.87.

Prices, according to AAA, have dropped for more than 40 straight days.

Martha Meade, public affairs manager for AAA Mid-Atlantic, said that in the past several days, she has seen five to eight cent overnight drops in gas prices, but said Tuesday night’s drop was just two to three cents.

“It’s still falling, so that’s good,” Meade said.

She believes price of crude oil is trying to stabilize at around $70 per barrel and said there’s a chance that nationwide, gas prices could drop to a $2 per gallon average. That will depend on consumer behavior and inventory, but she believes gas prices will remain lower through the end of the year.

“Whether we get there or not is going to depend on two things – one, if the consumer remains in kind of the stingy buyer mindset of not driving as many miles as they did last year. And the other is to what extent oil and gas producers are able to cut production in an effort to bring supply and demand in a tighter balance.”

For the trucking industry, with 2,500 companies going out of business so far in 2008, according to the American Trucking Association, pressures on the industry have “eased somewhat.”

Diesel prices are averaging $3.21 per gallon nationally, down from $4.02 a month ago, according to AAA.

“A lot of companies have been charging fuel surcharges,” said Clayton Boyce, ATA vice president of public affairs, “and the problem was that, even for those companies that used fuel surcharges, the diesel price was increasing so fast that the surcharges didn’t keep up with it, and that was cutting into the profit margin.”

Boyce said he expects the trucking industry to continue to feel the effects of the economic downturn.

“I don’t think the storm is over yet, because we also have a downturn in freight volumes to contend with,” Boyce said. “That has not turned around yet.”

ATA economists, according to Boyce, say that they are not forecasting a recovering until 2009 at the earliest.

But Meade said the current price drop couldn’t hurt, and it might even help lower prices at grocery stores.

“It’s certainly good news for consumers that even in the hard economic times, something is going down,” Meade said.