As many as 25 states could have sub-$2 gas by next week, AAA says

Source: By Niraj Chokshi, Washington Post • Posted: Thursday, January 15, 2015

If current trends continue, half the states in the nation could be home to an average gas price of less than $2 by next week, according to a new report.

The number of states with average regular gas prices below $2 rose from seven to 18 over the past week, according to a post Monday on AAA’s Daily Fuel Gauge Report, the automotive and travel information nonprofit group’s gas-price-tracking Web site. Unless current trends change, it’s projected to rise again over the next week from 18 — currently home to more than a third of Americans — to 25. But the months-long decline in oil — and subsequently gas — prices is not good news for everyone, AAA notes.

“While lower gas prices are certainly a welcome relief for consumers, the broad impact of sustained low oil prices are front of mind for many industry stakeholders,” AAA noted Monday. “In countries like the United States where the cost of oil extraction is more expensive, producers may be forced to reassess their plans to factor in profit margins that are sharply lower or even reversed as markets continue to register multi-year lows.”

Indeed, legislators in some energy-reliant states — principally Alaska — are on the verge of amending spending plans in light of the declines.

In every state but Hawaii, prices are at least $1 lower today than they were on June 1, around when worldwide oil prices began their decline. Over that period, the average price of gas in Hawaii dropped 94 cents in Hawaii, according to Washington Post calculations using AAA data. The gas price has dropped more than $1.40 in 38 states since June. Three states — Indiana, Ohio and Michigan — have seen the largest declines, between $1.90 and $2. Nationally, the price is $1.57 below its 2014 peak and at five-year lows.