By Sherry Vogel
The national average of gas prices officially dropped to $1.98 a gallon Dec. 22. These are the lowest gas prices in nearly seven years and quite a gift for consumers as they travel this season via car or air to holiday destinations. The lowest national gasoline prices are seen at the pumps in Missouri, Oklahoma, and South Carolina, which are down as low as $1.60 a gallon.
Prices in Montana range from $2.99 a gallon at Sweet Grass to $1.98 in Billings. Cenex in Baker is at a low of $2.09 and Prairie Fuels cash price is $1.99.
Further relief is felt as diesel, heating oil, and natural gas prices have also fallen sharply which helps lower income groups as winter heating fuel costs usually eat up a large share of their limited earnings.
We can thank a variety of market forces that are working together to push prices lower. Due to recent North American shale oil boom, crude oil prices are down by 60 percent since June last year. Drivers can credit a global glut of crude oil for the steady decline on gas prices. There is more oil out there due to increased production in North America contributed to new drilling techniques such as hydraulic fracturing “fracking” on land and new drilling in the Gulf of Mexico. Also, this time of year refineries are using a “winter blend” gasoline. This happens between September and October each year. Americans will pump this blend into their tanks until spring. The “winter blend” is available because in September the government starts to ease off clean air standards for oil refineries, allowing them to make gasoline cheaper by using hydro-carbons like butane. (Butane isn’t allowed in summer because environmental regulations require mixtures that don’t evaporate as quickly.)
Many analysts are predicting that the market has not reached its bottom and prices will eventually decline further into early January.