Gas prices are dropping, just in time for holiday road trips.
“Some people go a long ways, that’s quite a bit of money savings,” said Jerry Bauman.
A gallon of regular unleaded cost as little as $1.93 Thursday, while in Calallen, a number of stations charged $1.94. The number of stations charging less than $2.00 per gallon keeps growing.
“I’ve been watching it go down for the past week,” said Bauman. “It’s nice, I don’t know why it’s going “down, but it’s nice.
Texas A&M Corpus Christi Regents Professor of Economics, Dr. Jim Lee, has an idea why prices are going down.
“The combination of both supply and demand has been causing the drop in gas prices,” said Dr. Lee.
According to Dr. Lee, excess oil from Saudi Arabia combined with global economic uncertainty are keeping prices down.
“These low prices are great for drivers, but the refineries that produce the gas are a big part of the Coastal Bend’s economy,” said Dr. Lee. “So what do these low prices mean for them?”
It means lower profits. Thursday, oil traded at around $51 a barrel. Dr. Lee says the break-even point for refineries to make a profit is about $40 a barrel.
“In South Texas, we’re in a bittersweet situation,” said Dr. Lee. “It’s good for consumers, but at the same time not so good for our local economy which depends so much on oil production.”
And how long can we expect prices to stay low?
“At least for the rest of the year, another month or so, we expect low prices to stay,” said Dr. Lee.
According to AAA, gas prices are the lowest they’ve been in over a year.
Thursday’s national average is $2.44, the Texas average is $2.10.