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Road Worrier: NC gas prices plunge into $3 territory; will they go lower?

Gasoline prices at many Triangle stations have fallen below $3 for the first time in nearly four years. This Hess station in Garner was priced at $2.93 for regular on Monday and had a steady stream of customers.
Gasoline prices at many Triangle stations have fallen below $3 for the first time in nearly four years. This Hess station in Garner was priced at $2.93 for regular on Monday and had a steady stream of customers. jleonard@newsobserver.com

Gasoline prices at many Triangle stations have fallen below $3 for the first time in nearly four years, and that leaves cost-conscious drivers with a little more money for the other stuff.

“Oh, it will be spoken for,” said Gary Herman, 71, of Raleigh. “We keep a family budget, so we’ve got a pretty good handle on what we spend and what we should be spending.”

Herman had checked online to find the cheapest gas prices in town. His quest led him to a competitive cluster of South Saunders Street stations that were among the first in Wake County to sell regular gas for less than $3 a gallon.

He filled up Thursday at $2.979 a gallon in South Raleigh. Some outlets in Cary, Clayton and Fuquay-Varina were selling the stuff for less than $2.90. And on Monday, according to northcarolinagasprices.com – these numbers look a little wild, don’t they? – a sprinkling of stations across the state were posting prices below $2.80, including five stations in Four Oaks.

Prices at the pump should fall further in coming weeks, economists say, thanks mostly to a plunge in world prices for crude oil. Don’t think for a moment that these price-slashing stations are hurting themselves.

“The myth when you see that $2.90 range in Raleigh is people look at that and say, ‘Oh, those retailers must be getting killed,’ ” said Tom Kloza, chief oil analyst for Maryland-based GasBuddy, a fuel pricing service. “The reality is that prices have dropped so fast at wholesale, and the retail price is still drifting down.”

Most prices are still higher than $3, for now. The state average price dropped 11 cents in a week to $3.045 on Monday. Kloza expects the national average ($3.093) to fall as low as $2.95 in the next few weeks, with North Carolina among the states likely to dip below a $3 average.

That’s a threshold Triangle drivers haven’t crossed in many moons. Local gas prices quickly fell from above $4 to below $2 in the fall of 2008, at the onset of the recession, and did not rise above $3 again until the end of December 2010.

World oil prices have fallen – from $115 a barrel in June to the mid-$80s in the past week – amid growing worries about a possible oil price war between OPEC and non-OPEC suppliers, Kloza said.

Citigroup said the low petroleum prices would generate a global economic stimulus worth more than $1 trillion. If that number is accurate, the Triangle share should be worth about $300 million a year, said N.C. State University economist Michael Walden.

Lower gas prices mean less money going from our pockets to oil producers that are largely based overseas – and more money being spent locally.

“These savings will mainly be spent on other goods and services, thereby improving the revenues of local businesses,” Walden said. “Especially at this point of the year, the Christmas season, this is a big boost. This absolutely will help retailers.”

Arielle Ingram-David of Raleigh sometimes buys gas near where she works in Durham, but she filled up in South Raleigh late last week because none of Durham’s stations had cut their prices below $3 yet. She was glad to save money but cautious about her plans for it.

“I’m a college student with a 4-year-old,” said Ingram-David, 26. “I’m a budget person, so everything has to fit in my budget. This means a little bit left over for me in case gas goes back up.”

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