Early holiday gift: Gas prices fall below $3 a gallon in the Chattanooga area

Early holiday gift: Gas prices fall below $3 a gallon in the Chattanooga area

December 13th, 2012 by Dave Flessner in Business Around the Region

Gas prices dropped below $3 a gallon Wednesday at the Murphy USA gas station on Highway 153 in Hixson.

Photo by Allison Love /Times Free Press.


$2.95: Price per gallon at Murphy's in Hixson

$3.09: Average price of a gallon of regular in Chattanooga Wednesday, down by 6 cents from a week ago and 40 cents a gallon below the peak reached this year in August.

$3.315: Average price per gallon of gas nationwide on Wednesday

Source: AAA fuel gauge price survey

Roger Williams is heading back to Florida today with a 55-gallon drum of gas in the bed of his Ford F-250 Super Duty pickup.

The Signal Mountain military retiree, who works as a communications consultant during the winter in South Florida, filled up his truck and tank Wednesday at a Hixson Murphy USA service station for $2.95 a gallon -- the lowest price in Chattanooga in nearly six months and at least 30 cents a gallon below what he pays for gas in Florida.

"I hope prices stay this low -- and I wish they were like this in Florida," he said.

According to AAA's daily fuel gauge survey, average gas prices in Chattanooga fell nearly 2 cents a gallon Wednesday to their lowest level since July. Chattanooga prices at the pump averaged 22.5 cents per gallon less than the national average and gas prices were below $3 at a scattering of stations around the region.

"I never thought I'd be glad to be paying $2.95 a gallon for gas, but it's cheaper than its been in months," said Bob Bailey, a Soddy-Daisy motorist who commutes nearly 50 miles a day back and forth to work.

At age 73, Bailey remembers when gas was just 15 cents a gallon.

"Gas would be a lot cheaper if we allowed more drilling in this country," he said.

The early Christmas gift of cheaper gas reflects both seasonal and global trends, UTC economics professor Ziad Keilany said.

"There are always seasonal fluctuations, but overall the demand [for oil] is still somewhat sluggish while the supply of gas continues to grow," said Keilany, who previously served as a consultant to OPEC.

Oil prices pushed up the price of gasoline this summer primarily because of concerns over Syria and Middle East disruptions and the higher costs of refining summer-grade gas for urban areas with pollution, Keilany said. But the sluggish recovery, combined with improved gas mileage, is cutting the growth in demand for gas even as new drills and technologies are opening up more supplies.

"The demand for oil will continue to rise, but the growth in supply will likely be even faster," Keilany said.