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Gas Prices Drop Below $2 in Five States

24/7 Wall St. logo 24/7 Wall St. 4 days ago Douglas A. McIntyre
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Gas prices continue to slide. They have dropped below $2 in five states. And, in several more, the price for the average gallon of regular is close to that threshold. If oil prices remain below $50 a barrel, more states may join the list.

Gas prices are not just driven by oil. Refinery capacity is an important factor. Gas taxes are also a major variable. They range from $.777 a gallon in Pennsylvania, the highest, to $.307 in Alaska, the lowest. Most of the sub-$2 gas states are at the bottom of the tax list.

Many of the states on the low-priced gas list are near the Gulf of Mexico and the massive refineries close to Houston. Gas is $1.97 a gallon in Alabama, $1.98 in Oklahoma, and $1.99 in Mississippi and Arkansas. The only exception to the Houston rule is South Carolina, at $1.95 according to GasBuddy. The state's very low gas tax, at $.372 a gallon, is well below the national average, according to the American Petroleum Institute. Tennessee, Virginia, Texas, and Louisiana have prices barely above $2.  All of the other low gas states on the list are also near the bottom of the tax ladder.

There is a debate about where prices will go, mostly because oil has been volatile over the last month. AAA say prices have ticked higher, but the organization is not willing to forecast far into the future:

For the first time in five weeks, the national average gas price is increasing. At $2.26, today’s price has been moving higher since July 6 and is three cents more than last week. The moderate price surge follows a week of solid demand growth and a third straight week of gasoline inventory drawdowns across the country.

“Gas prices are still at some of the cheapest prices we’ve seen this year, but consumers should take advantage of them while they can,” said Jeanette Casselano, AAA spokesperson. “This week, drivers in 31 states are paying more than last week for a gallon of gas. And we expect to see slight price increases throughout July, so now’s the time to hit the road.”

Summer travelers will be off the road in two months, so demand could fall relatively soon.

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