Breaking the $3 barrier

Drivers in Coeur d’Alene are suffering from sticker shock. The good kind.

Gasoline prices in the area continued to plummet over the weekend. By Monday morning, several stations around town were selling gas at $3.09 a gallon.

And prices dropped even more overnight, with several stations selling regular unleaded for $2.99 a gallon Tuesday.

It’s a far cry from summer, when gas hovered around $4. Less than two weeks ago, on Sept. 25, gas at Fred Meyer cost $3.53 a gallon. It sold Tuesday for $3.09, with additional discounts available for store card holders and frequent shoppers.

“Isn’t it great?” said Cassie Devaney, public relations manager for AAA Washington. “That’s the best thing, to see those prices come down.”

Drivers agreed. Anne Alexander, of Sandpoint, was so excited to see gas at $3.09 Monday at the Holiday station at Highway 95 and Haycraft Avenue that she quickly crossed two lanes of traffic to get there.

“I said, ‘Oh my God, 3.09!’ … I’m thrilled,” Alexander said as she gassed up her GMC Yukon. “When I bought my truck, it was $60, $65 to fill it up. Last month it was $100.”

Jennie Jones, manager of the Haycraft Holiday station, said it hasn’t been unusual for prices to drop by 10 cents a gallon overnight.

The result is happier customers – and more who are filling up rather than putting in $10 or $20 worth at a time.

“We had one girl come in and only put $10 worth in,” Jones said. “She said, ‘I want to see if it goes down again tomorrow.’ ”

Spokane customers don’t have as much to celebrate: On average, according to AAA, gas cost $3.50 a gallon in the city Monday. Prices are typically higher in Spokane because of Washington’s higher gas tax.

Devaney said that while AAA is not in the business of gas market analysis, it expects gas prices to continue to drop for the next couple of months, barring a spike in oil prices or a major supply disruption.

What’s driving the dramatic price change?

A perfect storm, she said, with positive ramifications. Lower gas prices, in seems, could be the only good news to come out of the nation’s current financial crisis.

“There’s been speculation about slowing economic growth, not just in the United States, but globally,” Devaney said Monday. Oil prices, she added, have declined in anticipation of the slower growth.

At the close of trading Monday, crude oil was down $6 to $88 a barrel.

“That’s $10 less than it was a week ago,” Devaney said. “That’s huge.”

It rebounded slightly Tuesday, to $90. Still, the price is far lower than it was in July, when oil reached a record high of $147 a barrel.

Also contributing to the drop in gas prices is the return of “business as usual” in the Gulf states. Hurricanes Ike and Gustav significantly damaged the nation’s petroleum distribution system, which affected supply for several weeks at summer’s end.

“We don’t really have that problem anymore,” Devaney said.

That’s good news for Kathryn Rude, of Spokane. She works in Coeur d’Alene, so her commute this summer has been costly. She makes a point to buy gas in Coeur d’Alene.“I e-mailed my fiancé saying, ‘Oh my God, it’s $3.09,’ ” Rude said as she filled up at the Holiday station. It seems funny to be so happy about three-buck gas, she said, laughing.

Ron Cox, of Sandpoint, who pulled into Holiday on Monday driving a Chevy Silverado pickup towing a trailer, is glad – to a point – to see prices falling.

“It’s ridiculous,” he said. “It should be lot less than that.”