South Carolinians began the new year with gas prices continuing to fall.
GasBuddy.com’s report showed prices averaging under $2 a gallon at $1.98. That compares to $2.24 a year ago and is 18 cents a gallon lower than just a month ago. The national average is $2.25 a gallon, with a fall in price of 21 cents a gallon in a month.
"As the national average price of gasoline continues to test multiyear lows, U.S. motorists are keeping over $250 million in their pocket every single day vs. 80 days ago,” according to Patrick DeHaan, head of petroleum analysis for GasBuddy.
“The plunge has seen sub-$2 gas prices show up at over a third of all gas stations in the country while 11 states have seen average prices dip under the $2 level. The most common price at gas stations in the U.S. is now $1.99 per gallon while the second-most-common price is just $1.89.”
Motorists are not complaining but they surely are wondering how much longer the downward trend will last.
GasBuddy says not a whole lot longer, predicting that 2019 will feature a yearly national average of $2.70 per gallon, representing a 3-cent drop from 2018. The forecast is for a national average price as high as $3 per gallon as soon as May.
“While the bargain-basement gas prices we’ve been seeing in areas across the country have been terrific and most welcomed, the party at the pump will likely wrap up in the next month or two, and prices will begin to rally as OPEC production cuts and a strong U.S. economy push gas prices back up,” according to DeHaan.
“While the national average failed to hit $3 last year, we have an even stronger possibility of seeing that ugly possibility, which would push prices in some places from $1.99 today to over $3 this spring -- which would be an impressive and shocking turnaround in just a few months,” DeHaan said. “One caveat however, that may have motorists unexpectedly spending less, is what happens in the White House. Should all the darkest realities come to fruition, it could lead to a slow down in the economy and take gas prices right along with it. … Buckle up for the extra volatility we’re going to see.”
As hard as it is to say, the higher gas prices may be a good thing.
According to a Chris Arnold report for NPR, the lower prices may not be very good for the economy as whole.
"Is it possible that lower oil prices could actually hurt the U.S. economy?" Vipin Arora, an economist with the U.S. Energy Information Administration, said in the NPR report.
Arora's findings are based on his own research and thus isn't the government's official word. But his research suggests that cheap gas might be bad for America.
Arora analyzed government data and found that what's changed is that the oil and gas industry as a share of GDP has about doubled in the past decade. Now it has grown so large that it's changed the basic equation of whether cheap gas is a good thing overall.
"The benefits to consumers could be around $140 billion from gasoline savings," Arora says. "But the losses on the other side due to lower production, less investment, less build-out of infrastructure could be around that amount. So we're kind of at a wash."
This might help to explain why the economy still isn't exactly charging forward even with the stimulus of cheap energy, according to the NPR report. But Arora himself notes the question needs more study.
Agreed. And for now we’ll stick with the contrasting opinion of consumers and some others studying the impact of gas prices.
Analysis by the research firm Moody's Analytics found that cheap oil and gas are still a net positive.
"The bottom line is the United States economy is much better off with low-price energy than it would be with high-price energy," Philip Verleger, an economist and consultant who tracks energy markets, said in the NPR report.