Petroleum prices are on the decline, providing welcome yet minimal relief from the sinking national economy.
Pumps across the state averaged $2.55 a gallon Tuesday after decreasing $1.09 from last month, according to AAA Michigan.
Gas prices drop below 2007 average for first time this year
Last week marked the first time this year that current gas prices dipped below 2007’s average of $2.93.
“Crude oil prices are in the $70 (per barrel) range now, which is about half of what we saw in summer,” said Nancy Cain, a spokeswoman for AAA Michigan. “It’s all a matter of supply and demand. The world and U.S. economy aren’t as robust and people aren’t (driving) as much.”
Gas prices stand at an average of $2.63 nationwide and $2.53 in East Lansing.
This marks the fifth consecutive year of declining gas usage, said Jeffrey Pillon, an energy analyst for the Michigan Public Service Commission.
In the past, there had never been more than two consecutive years of declining gas usage.
“Extremely high prices of crude oil in the first half of the year have had an extreme impact on the demand for oil,” Pillon said. “Not only did the demand decline, additional supply is being produced.”
The slowing of global economies — including China’s — has quickened the decrease in gas prices, Pillon said.
Charles Ballard, an MSU economics professor, said two factors could reverse the trend of low gas prices.
“One is if the world economy goes back up, and two is any time there is political turmoil in the regions where we get gas,” Ballard said.
Nigeria, Venezuela and Russia are some of the oil-producing regions, and hostility in those countries would likely raise prices, Ballard said.
Generally, there’s some amount of moderation in gas prices during winter months, but that varies greatly, Ballard said.
“There’s a seasonal pattern of higher prices in the summer because people travel a lot,” he said.
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Low gas prices mean greater peace of mind for students when they go to the pump.
“It’s easier and more comfortable to fill up and there are not as many worries,” said Marc Osborn, a no-preference freshman.
Studio art freshman Ryan Hawn spends 45 minutes a day commuting to MSU from Owosso, and said he has a little more money in his wallet now that gas prices are down.
“I’ve saved a little bit and feel a little better,” Hawn said.
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