PRICE AT THE PUMP
The average price of a gallon of gas in Chattanooga fell Tuesday to just over $3.50 a gallon, or 5 cents a gallon cheaper than last week and 6 cents a gallon below a year ago. Nationwide, AAA’s fuel gauge survey found the gas prices averaged just over $3.70 a gallon for regular gas on Tuesday, a dime per gallon cheaper than a year ago.
Gas prices are heading back down at last. Coming in tandem with the end of the payroll tax holiday, expensive gasoline punched a hole in the family budget during the first two months of 2013. The good news is that prices headed back down in the past week. The bad news: the relief may not last.
At a national average of $3.71 per gallon, gas is still nearly 50 cents higher than it stood just before Christmas. Nevertheless, you will pay about 10 cents less than you did last year at this time. And for now, the trend should continue to moderate.
But don’t get used to it. Several factors contribute to the ultimate cost at the pump, and most of them are likely to push back as we head into summer. Bummer.
The most significant constituent of the price of gas is the price of oil, roughly 72 percent of the total (the rest goes to taxes, refining and marketing). Thankfully, oil prices have been trending lower recently in response to decelerating global growth and its concomitant impact on demand for crude. But with inventories declining and the prospect of improved U.S. economic activity, the downswing in crude oil may be bottoming.