Update: Despite ‘cap and trade’ fees gas prices continue to fall into 2015
No doubt you’ve been doing traveling over the holiday and you’ve noticed that your gas bill at the pump has been lower. Where earlier in the year you may have paid 60 to 80 dollars to fill up. You may be paying 35 to 50 dollars a tank.
According to the Federal Energy Information Commission, the national average of gasoline is expected to drop to $2.60 per gallon in 2015. Right now on the Central Coast you can find $2.35 a gallon for regular unleaded at ARCO gas stations. That could spell below $2.00 a gallon gas in 2015 for the Central Coast. For us Californian’s who love our cars, that’s not hard to take.
California’s ‘cap and trade’ fees, that some are calling a gas tax, will be added at the pump this year. Perhaps a dime a gallon is being added in the near term. But analysts looking at the big picture say that in the long term in California the downward cost of crude as the oil glut continues will swallow that dime and add substantial savings for drivers in 2015.
There are several factors for the continued downward trend on gas prices.
The first and most glaring factor is there’s a huge glut of oil in the world driving crude oil prices down. The U.S. has been increasing its oil production and filling storage tanks and curbing buying expensive oil from overseas. Word is that overseas oil producers aren’t necessarily lowering their pumping either. That has contributed to lower domestic prices for refineries and lower prices at the pumps. On Wednesday, the last day of 2014, crude oil prices ended lower on the New York Mercantile Exchange. The near-month contract for the benchmark grade fell 85 cents — closing at $53.27 a barrel.
So what does that mean to you and me? According to a Bankrate analysis of government petroleum statistics, each American driver stands to save about $452 on gasoline in 2015 if the national average holds at $2.60.
Another factor is that there has been no big natural disaster in the Gulf of Mexico in 2014 which is the prime oil pumping ground for the U.S. We’ve all seen the spike at the pump when a hurricane shuts down oil production at wells in the gulf.
And don’t forget the winter verses summer blend of gasoline. Winter blends tend to be lower in price at the pump and that usually kicks in around September of the year for some places and a little later for California.
Experts also say that people are driving less with gas prices higher. Not to mention more fuel efficient engines and hybrid technology that is taking off in urban areas. But the urge to drive more may return now that gas pump prices are at 5 and half year lows.
