Coming This Fall: The Return Of Cheap $2 Gas


So far this year, U.S. drivers have enjoyed unusually low gas prices, due to a variety of factors.

But it seems they could be even lower.

While gas prices are at their lowest in years, oil prices have dropped by an even greater margin, meaning there should be room for gas prices to decrease even more.

DON'T MISS: Gas Prices Matter To U.S. Households, But Only Somewhat

That's the gas-price scenario spelled out in a recent report from Time, which claims prices could drop to around $2.00 per gallon in certain areas of the country this fall.

The national average price for a gallon of gasoline this week is $2.66, up from $2.58 a week ago.

This is because of price spikes in two regions of the country--the Midwest and the West Coast--the article says.

Oil field (Image: Flickr user johnny choura, used under CC license)

Oil field (Image: Flickr user johnny choura, used under CC license)

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It claims specific reasons for price increases in those areas will soon be addressed, which should bring the national average closer to $2.00 per gallon in the coming months.

The cause of the higher prices appears to center around problems at refineries in California and Indiana.

An explosion at an ExxonMobil refinery in Torrance, California, earlier this year has reportedly kept prices in the state high.

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As the oil industry entered the summer driving season, the reduced capacity put a squeeze on supplies in California, and apparently affected West Coast states as well.

The refinery has been operating at 20 percent capacity for months, although operators hope to soon boost capacity by recommissioning older equipment.

The shutdown of a refinery in Whiting, Indiana, reportedly caused similar problems in the Midwest.

Fuel filler of Volkswagen Gol, Brazilian flex-fuel vehicle

Fuel filler of Volkswagen Gol, Brazilian flex-fuel vehicle

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Gas prices reportedly climbed as much as 40 cents per gallon overnight in Cincinnati. The current average price in Chicago is $3.46 per gallon--up 70 cents from a week ago.

Once these refinery problems are addressed, though, oil-industry analysts believe prices will begin to decline.

The national average could drop 10 to 15 cents by early fall, and 50 cents before the end of the year, according to Tom Kloza, of the Oil Price Information Service.

MORE: Gas Prices To Rise Again, So Fuel Economy Crucial In New Cars, Consumers Say

However, prices may decrease more slowly in California, where gas tends to be somewhat more expensive than in other parts of the country.

Analysts have already blamed low gas prices for increased sales of SUVs and the stagnation of certain green-car segments.

While gas prices aren't the only factor that influences a new-car purchase, it will be interesting to see what impact even lower prices have on green-car sales.

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