Monday, October 13, 2008

The average price of regular gasoline at U.S. filling stations fell by a record amount to $3.31 a gallon, an industry survey showed.

Gasoline dropped 35 cents, or 9.5 percent, in the two weeks ended Oct. 10, according to oil-industry analyst Trilby Lundberg's survey of 7,000 filling stations nationwide. Crude oil, which accounts for about 73 percent of gasoline's pump price, has fallen 46 percent from a record $147.27 a barrel reached on July 11.

"Lower crude oil prices are the main cause of this record drop of 35 cents per gallon in the past two weeks," Lundberg said yesterday. "Secondarily, but also extremely important, is that U.S. gasoline demand has caved. Both of these come from higher prices."

AAA said yesterday that regular gasoline at the pump is $3.247 a gallon, down 21 percent from the record $4.114 reached July 17, and 18 percent higher than a year earlier.

The decline comes as tightening credit markets, bank failures and rising unemployment claims may indicate that the U.S. is entering a recession, curtailing fuel consumption.

The highest average price for self-serve regular gasoline in the continental United States was $3.91 a gallon in Honolulu, Lundberg said. The lowest was in Wichita, at $2.79 a gallon. On New York's Long Island, the price was $3.44 a gallon.

-- Bloomberg News