The sights were so surprising that Americans shared photos of them – filling station signs with prices of US$2-something a gallon.
“It’s stunning,” says Tom Kloza, chief oil analyst at the Oil Price Information Service. “I’m a little bit shocked.”
The national average price of petrol fell 33 cents to end last month at $3 a gallon and dipped on Saturday to $2.995, according to the US motorists’ group AAA. That marked the first time in four years that petrol had been cheaper than $3 a gallon [one gallon is 3.8 litres].
The national average crept above $3 a gallon in December of 2010, as global demand for oil and petrol was rising as people in developing countries bought cars by the tens of millions and turmoil was brewing in the Middle East.
Now demand isn’t rising as fast as expected, drillers have learnt to tap vast new sources of oil, particularly in the US, and crude continues to flow out of the Middle East.
Seasonal swings and other factors are likely to send petrol back over $3 sooner than drivers would like, but the US is on track for the lowest annual average since 2010.
Trisha Pena of Hermitage, Tennessee, recently paid $2.57 a gallon to fill up her Honda CR-V. Like many around the US these days, she was delighted by the price she took a photograph and posted it on social media.
“I can’t remember the last time it cost under $30 to put 10 or 11 gallons in my tank,” she said. “A month ago it was in the $3.50 range, and that’s where it had been for a very long time.”
Historically, a stronger economy in the US, the world’s biggest consumer of oil products, usually meant rising fuel demand. No longer. Americans are driving more efficient vehicles and their driving habits are changing. Michael Sivak of the University of Michigan Transportation Research Institute calculates that the number of miles travelled per household and gallons of fuel consumed per household peaked in 2004.
And so petrol is cheaper than milk again. In September the national average price of milk was $3.73 per gallon. The annual average for milk is on track to be more expensive than the annual average for petrol for the first time since 2011.
The drop from last year’s average of $3.51 per gallon will save the typical US household about $50 a month. It will save the country’s economy $187 million a day, and also boost the profits of shippers, airlines, and any firm that sends employees out on sales calls or for deliveries.
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