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NEW YORK -- Over the past two weeks, the average price for a gallon of regular gasoline in the United States dropped by the largest amount since 2008 due to lower crude oil prices, a large decrease in California pump prices and the effects of Superstorm Sandy, according to the Lundberg Survey.
The average per-gallon price of $3.7529 on Oct. 29 fell 20.75 cents to $3.5454 per gallon as of Nov. 2, Reuters reported. This decease marks the largest two-week drop since Lundberg recorded a 21.9- cent decline on Dec. 5, 2008, caused by a crash in petroleum demand during the global recession.
Despite the hours-long lines for gasoline in many areas of New York and New Jersey, Sandy caused some of the price decline by preventing many drivers from traveling, according to Trilby Lundberg, editor of the Lundberg Survey. Although demand was high, overall purchases were down, and supply shortages did not cause an increase in price.
"There is a fear among retailers that they will be accused and prosecuted for price gouging if they raise prices enough to prevent running out," said Lundberg, who predicted that the supply problems are not likely to end soon. “It's going to be a long and hard recovery for infrastructure and fuel supply, but also for fuel demand.”
Lundberg also pointed to the seasonal dip in demand that typically comes in August after the summer driving season ends as a reason for the price decline.
The 49-cent drop in California's pump prices, which fell off following an extreme price increase a month ago, also contributed to the total U.S. price decline, according to the report.
Gas prices have fallen a total of 29.21 cents in the last month, Lundberg stated. The highest price of regular gas recorded for the Nov. 2 survey was $4.05 in San Francisco, with the lowest at $3.11 in Memphis, Tenn.
AAA Chicago's latest Fuel Gauge Report also showed a sharp decline in Illinois fuel prices, with the average gallon of regular unleaded gasoline decreasing 32 cents in October to an overall average of $3.75 for the month, 26 cents higher than last year. Additionally, Indiana saw a 40-cent drop in average gas prices for the month, down to $3.58, which is 24 cents higher than last year.
October marked the largest month-over-month decline since October 2008 for both states, according to the AAA report.
"Gas prices at the end of October were dropping at the fastest speeds in nearly four years," stated Beth Mosher, director of public affairs for AAA Chicago. "If this trend continues, motorists could be paying less than last year to fill up their cars."
If refineries see a smooth post-Sandy restart to production, AAA predicts that gas prices will continue to drop through the end of this year. While the Northeast is a significant gasoline consumer, it is not a major gas producer, so the drop in demand will lilely outweigh disruption in gasoline production, the report noted.