AAA: Fuel conservation paying off
Fuel prices are continuing to drop to levels that haven’t been seen in more than four years.
As of Friday, AAA estimated that the Alabama average for regular unleaded fuel is at $1.71. The last time fuel prices reached this low was April 19, 2004.
AAA spokesperson Clay Ingram said this still might not be the lowest prices we see this season.
“It’s possible that fuel prices could go below $1.50,” he said.
One of the biggest reasons why gasoline has dropped so fast is because the cost of crude oil has fallen even faster. Yesterday, the price of crude oil was around $41 a barrel, which is down about $100 from an all-time high set earlier this year.
In addition to the usual decrease in driving this time of year, Ingram said people changed their driving habits and are driving more fuel-efficient vehicles to reduce the demand for crude oil.
“People have done a lot better at conserving fuel, and it has finally caught up with the markets,” Ingram said. “There was a time when the demand wasn’t affected by the high prices. We continued to pay the high prices for a while, but we have changed our habits.”
The value of the dollar also affected oil prices. Ingram said the dollar was so devalued that it caused our costs to increase tremendously.
Also, markets were desperate to find something that would go up. So, investors began purchasing oil as investments.
“Any little hiccup causes the prices to skyrocket. Before prices could recover, something else would happen that would inflate oil even more,” Ingram said. “They have finally settled down to levels where they should be.”
Even though drivers are experiencing lower prices, they still aren’t driving like they used to. Ingram said part of that is because they have gotten used to driving less and the current state of the economy.
“People are watching what they spend a whole lot closer because they don’t have extra money to spend,” he said. “Consumers are being more deliberate in what they spend. They are being careful not to overspend.”
Ingram said he expects the prices to remain at this level or possibly fall a little more the rest of the month. In fact, Ingram said he thinks prices could continue to fall through February until travelers begin to increase their driving again in March.
— Brent Maze can be reached at email@example.com.