2008 Woodie Awards
Gasoline prices drop before break
By: Kelly O'Connor
Issue date: 11/19/08 Section: News
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The national average price of regular gasoline dropped more than $1 since this time last year, according to the AAA Web site.
Many students drive long distances to go home for the break, and with gas at a state average of $2.365 per gallon, according to AAA, the burden of filling up just got lighter.
Junior Will Dempster will drive nearly 500 miles to Los Angeles to visit his family, he said.
"I remember when gas was almost $5 per gallon," Dempster said. "That was the last time I drove home, but now that it's half the price I can make two trips - Thanksgiving and Christmas."
As of Tuesday, Reliance Gas, located on Mangrove Avenue, serves the least expensive gas in Chico at $2.07 per gallon, according to californiagasprices.com.
"I'll fill up before I go, but I won't be stocking up," Dempster said. "It will be cheaper to just buy as I go."
The price of crude oil is the least expensive it has been in more than two years, according to the Energy Information Administration Web site. Consumers can expect the price of gas to stay low.
"Students are one of the most impacted markets when gas prices fluctuate," said economics professor Bob James. "It is such a huge part of their budget."
Most students don't really understand what drives the market, James said.
"It's not some guy in a suit with devil horns and hooves," he said. "It is anyone who participates, even me."
Anyone who speculates about the market drives it, not logic or fundamentals, James said.
"We call this the 'speculation bubble' when fear of rising prices makes people buy more, raising demand and raising prices," he said. "The burst of that bubble, coupled with a worldwide slowdown, has helped drive down the price of gas."
Low gas prices create optimism about the economy, which is low because of crises, mortgage failure and inflation, James said.
The highest gas price was a state average of $4.58 on June 16, according to the EIA Web site.
"When gas is expensive, it brings everyone down," James said. "The price drop should lift us up a bit."
Kelly O'Connor can be reached at
koconnor@theorion.com
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