Gas prices always go down in the fall, but usually not this much.
At 56 percent of the nation’s gas stations, the price of gas is now under $3 per gallon, according to Michael Green, a spokesman for AAA, an auto club federation. AAA collects information on gas prices from consumers who use between 80,000 - 100,000 different U.S. gas stations every day, Green said.
This is a huge change from a year ago, Green said, when only 11 percent of stations were selling unleaded fuel for less than $3. Gas hasn't been this cheap in nearly four years, AAA said in a statement on Monday.
Gas prices always fall in the autumn, as colder temperatures mean fewer people go on road and boat trips, said Patrick DeHaan, a senior petroleum analyst at GasBuddy, a website that lets people share information about gas prices.
Yet today's prices are way down even when compared with previous seasonal lows, as this graphic shows:
(Chart courtesy of AAA)
The low cost of gas could be a boon for the U.S. economy: spending less to fill up their tanks means Americans have more disposable income going into the holiday season. U.S. households save $120 for every 10 cent drop in the price of gas, the New York Times reported earlier this month, citing GasBuddy's Tom Kloza.
There are a few reasons why gas is cheaper this fall than in previous years. For one thing, crude-oil prices have tumbled recently as investors fear that a global economic slowdown could weaken demand.
When the price of oil falls, the price of gasoline falls, too. Experts say the price of oil makes up about two-thirds of the price of gas. Other factors, such as taxes and refining and distribution costs, also play a role in determining the cost of a gallon of gas.
In many places in America, gas is even cheaper than $3 a gallon:
(U.S. gas price heat map courtesy of GasBuddy)
Oil prices are also falling because major OPEC oil producers Saudi Arabia, Iraq and Iran chose to slash prices earlier this fall, DeHaan told The Huffington Post.
Analysts have speculated that Saudi Arabia, which produces more oil than any other OPEC member, wants to increase its share of the market.
“If there’s a landlord who sells all his houses for greatly under value, it causes the whole market to tank,” DeHaan said. “That’s what’s happening with oil. The Saudis are basically flooding the market with cheaper oil, and that’s putting a huge amount of downward pressure on oil prices.”
One more reason gas is so cheap, according to DeHaan: The U.S. is sucking more and more oil out of the ground than at any time since the 1980s. “So we have all these sources of new crude oil in the U.S., and that’s adding to the global oil supply, which naturally pushes prices down,” he said.