NEW YORK – The worst is over, for now. Gasoline prices are starting to fall.
After a four-month surge pushed gasoline to nearly $4 per gallon in early April, drivers, politicians and economists worried that gasoline prices might soar past all-time highs, denting wallets, angering voters and dragging down an economy that is struggling to grow.
Instead, pump prices have dropped 6 cents over two weeks to a national average on Friday of $3.88. Experts say gasoline could fall another nickel or more next week.
Drivers might also get to say something they haven’t since October 2009 – they’re paying less at the pump than they did a year ago.
Gasoline prices are lower than they were a year ago in 11 states, according to the Oil Price Information Service. At $3.88, the national average is still high, but it’s down from a peak of $3.94. Predictions of $5 gasoline earlier this year have – mercifully – evaporated.
Several factors have contributed to the lower prices at the pump:
• Oil prices have fallen in recent weeks. Iran and the West are negotiating, the growth in demand for oil has moderated, and world oil supplies are rising again thanks to more production from Saudi Arabia, Libya and the United States. Oil has fallen to $103.05 per barrel, down from a peak of $110.55 on March 1.
• Potential buyers for two East Coast refineries have emerged, so they are now expected to stay open.
• Demand in the U.S. has dropped by about 6 percent, compared with the same period last year, according to the latest government data. In response, gasoline futures have since dropped by 8 percent. That’s expected to cut the price of wholesale gasoline, and those savings will be passed on at the pump.