The average price of regular unleaded gasoline dropped 2.7 cents to $2.436 a gallon from $2.463 a day before, according to the survey released by motorist group AAA.
Gas last sold in the $2.50 range in mid-March 2007. The average price dropped below $3 a gallon on Sat., Oct. 18, for the first time in nearly nine months.
Gas prices have fallen for 46 straight days, shedding $1.41 since hurricanes battered the Gulf coast in September.
Unleaded is now down $1.67 or over 40% from a record high of $4.114 a gallon in mid-July, down in part due to the 50% drop in crude oil from its peak near $150 a barrel in mid July to its current trading price of around $63 a barrel. "[The price of] crude oil makes up about 70% of a gallon of gas," said Jason Toews, co-founder of GasBuddy, a network of web sites that list local gas prices state-by-state.
He also attributed the price cuts to the end of the summer driving season, when demand for gasoline drops off. "We will see gas prices continue to fall," said Toews. "By December it will be about $2.20," he added.
Americans are driving 5.6% fewer miles than last year, according data from the U.S. Department of Energy. A weekly trade survey from MasterCard showed motorists consumed 6.4% less gas in the past week compared to a year ago.
But, Torres said, gas prices will likely start rising again in late January 2009 as driving starts to pick up again and crude oil prices bottom out. "There's only so far that crude oil prices can go. A lot of major oil fields are not profitable below $60 a barrel for oil," he said, referencing the Alberta oil sands, a rich deposit of oil in Canada that is expensive for oil companies to tap.
State prices: Gas remained above $3 a gallon in Alaska ($3.497) and Hawaii ($3.381), according to AAA, but of the lower 48 states, California had the most expensive gas at an average of $2.834 a gallon, followed by New York at $2.812 and Nevada at $2.714.
Other fuels: The price of diesel fuel, which is used by most trucks and commercial vehicles, fell to a nationwide average of $3.265 a gallon, according to the survey. The most expensive state for diesel was Hawaii, at an average of $4.795 a gallon, while the cheapest was Oklahoma at an average of $2.956 .
Meanwhile the price of E85 ethanol, an 85% ethanol blend that can be used as a gasoline alternative in specially equipped "flex-fuel" vehicles, declined to a nationwide average of $2.274 a gallon from $2.284 the day before, according to the AAA survey.
The AAA figures are state-wide averages, and individual drivers may see lower fuel prices in different areas of each state.
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