MONEY Gas

5 Cheap Gas Factoids That’ll Get Your Motor Running

gas station
Sharon Meredith—Getty Images

One way to appreciate the way gas price have plunged is to simply gas up. Depending on what you drive and where you live, filling up the tank is probably around $30, maybe even less.

Not long ago, that fill-up probably cost more like $50. Here are a few more factoids to help wrap your brain around just how cheap gas has gotten in recent months—and how much money drivers can expect to save if prices remain low.

Prices are falling by 1¢ daily.
As of Monday, according to AAA, the national average for a gallon of regular was $2.13, down from $2.20 the previous Monday. Over the last three weeks, the average has dropped 27¢, and one month ago, the average was $2.60. Prices at the pump have decreased for more than 100 consecutive days, and recently prices have been falling by an average of more than 1¢ per day. If we stay on the pace of a 1¢ daily drop—which is a complete and total impossibility, of course—gas would be free in 213 days, just in time for road trips in August.

Only 1 state averages over $3 per gallon.
Unsurprisingly, it’s Hawaii, where the average is $3.42. Alaska is usually the other persistently high outlier for gas prices, and the average there dropped under $3 recently, measuring $2.93 on Monday. Bear in mind that sub-$3.50 gas is very cheap for the Aloha State, where the average was $4.16 for 2014 overall. Average Hawaii gas prices were as high as $4.67 in 2012.

19 States (and counting) are averaging under $2.
They are: Alabama, Arkansas, Colorado, Iowa, Idaho, Indiana, Kansas, Louisiana, Michigan, Minnesota, Missouri, Mississippi, New Mexico, Ohio, Oklahoma, South Carolina, Tennessee, Texas, and Missouri—which is the cheapest state of all, averaging just $1.77 per gallon. Meanwhile, Arizona, Montana, Nebraska, South Dakota, Virginia, and Wisconsin are all averaging $2.05 or less, and they are likely be the next states to break the $2 barrier.

One gas station is charging $1.49 per gallon! It’s in Texas, as GasBuddy pointed out in a post that also noted that 45% of all gas stations in the country are charging under $2 per gallon. Remember that as recently as December, it was considered an extraordinarily big deal that any gas station was bold enough to cut prices below the $2 mark. We’ve reached the time when sub-$2 gas more or less seems standard—and when the average of one month ago ($2.60) seems high, even though that’s roughly $1 cheaper than the year-long average in 2012.

Americans could save $75 billion on gas this year.
AAA analysts predicted that, compared to fuel costs in 2014, American drivers would collectively save “$50-$75 billion on gasoline in 2015 if prices remain low.” That forecast was made at the end of 2014, when the national average was $2.26 per gallon. Based on the continue swift decrease in prices, and by indicators such as the Saudi prince who said “we’re never going to see $100″ as the per-barrel price of oil ever again, it wouldn’t be surprising if we wind up on the high side of AAA’s predictions. Another 2015 gas price forecast, from GasBuddy, predicted recently that the national average would bottom out at $2.23 in January. We’re already 10¢ below that mark nationally.

Granted, the plummeting price of gas isn’t entirely good news for consumers. Studies—not to mention logic—indicate that cheap gas equates to more driving, and more driving is correlated to more traffic accidents and deaths on the road. What’s more, cheap gas provides an incentive against utilizing more environmentally-friendly, fuel-efficient hybrids and alternative-fuel cars, such as the Toyota Prius, which doesn’t save drivers as much in gas costs when gas is inexpensive.

Finally, the drop in gas prices has helped push the argument that gas taxes should be raised in order to fix America’s roads and address other infrastructure needs. Over the weekend, a New York Times editorial noted that in light of gas prices falling 40% since June, now is “the perfect time for Congress to overcome its longstanding terror of offending the nation’s motorists and raise the tax on gasoline and diesel fuel.”

MONEY Autos

How Cheap Gas Can Be Deadly

gas pump lying on ground
Shannon Fagan—Getty Images

Research shows that there's a correlation between low gas prices and increased traffic fatalities.

According to numbers crunched by the Oregonian, traffic fatalities in Oregon jumped 13% in 2014. Preliminary data shows that 352 people were killed in the state due to traffic accidents, up from 313 in 2013. Last year’s death total was the highest it’s been in Oregon since 2009, when there were 377 traffic fatalities.

At least some of the 2014 spike, the report surmises, can be attributed to gas prices falling lower and lower during the second half of the year. As gas gets cheaper, more drivers take to the roads, and the likelihood of accidents increases.

The phenomenon isn’t limited to Oregon. Earlier this week, NPR aired an interview with Guangqing Chi, a sociologist at South Dakota State University whose research reveals it’s a foregone conclusion that cheaper gas equates to more accidents (and deaths) on the roads. In one study, a 20¢ drop in gas prices in Minnesota was linked to an extra 15 deaths annually. In Chi’s hypothetical estimation, “a $2 drop in gasoline price can translate to about 9,000 road fatalities per year in the U.S.”

Still, there is no direct causation, and any surge in accidents in 2014 must be viewed in a historical context: There were routinely around 450 traffic fatalities in Oregon in the mid-’90s, so even with the recent jump in accidents, the roads are considerably safer a decade later. What’s more, several states, including Missouri, New York, Tennessee, and Vermont, are actually reporting a decrease in traffic fatalities coinciding with plummeting gas prices last year. It’s also unclear to what extent constant improvements in car design and safety features have helped keep fatality tallies down, but surely they factor in.

While Oregon’s traffic fatality spike shouldn’t be viewed as proof that cheaper gas causes more deaths, what we do know is that—generally speaking, over time—more drivers are out on the roads when prices are low at the pump, and more crowded roads mean more accidents. Chi’s research backs this theory up.

It’s not just that cheap gas encourages more people to hit the road, however. When gas is expensive, people are more likely to drive like Grandmas—accelerating slowly and cautiously, braking hard only when it’s absolutely necessary, using cruise control or just maintaining a steady speed on highways. Drivers may be doing so primarily because these techniques help you get the best fuel economy, but it’s also pretty obvious that driving in this manner is simply safer.

Driving like a jerk, on the other hand, has been shown to be costly in more ways than one. A 2012 GM study estimated that people who don’t bother with “smart driving” techniques like accelerating slowly and keeping the car at 70 mph rather than 80 mph on highways could expect to pay up to $100 more in gasoline per month. And it’s easy to see how speeding and stomping on the gas and brake pedals hard—which we’re more likely to do when gas prices are cheap—can result in more accidents.

MONEY Autos

President Obama Strongly Hints You’ll Regret Buying a Gas Guzzler

"Folks should enjoy" gas prices while they're low, the president said this week. But he warned it would be foolish to expect gas to stay cheap forever.

In an exclusive interview with the Detroit News, President Obama explained that while Americans “should enjoy” cheap gas prices across the country, long-term projections call for rising demand for oil in the U.S. and other parts of the world. Which means a return to higher fuel prices in the future is more or less inevitable.

Consequently, Obama said that it’s wise for Americans to operate—and spend, particularly in terms of big-ticket purchases—with the assumption that gas won’t be under $3 per gallon indefinitely. “I would strongly advise American consumers to continue to think about how you save money at the pump because it is good for the environment, it’s good for family pocketbooks and if you go back to old habits and suddenly gas is back at $3.50, you are going to not be real happy,” he said.

In reality, when you look at the auto sales trends of 2014, what with purchases of fuel-efficient hybrids like the Toyota Prius flagging while SUVs and luxury cars soar, it appears as if consumers have pretty much been doing the opposite of what the president is advising.

To be fair, consumers haven’t totally abandoned the idea that it’s smart to own a vehicle that gets good gas mileage. Today’s SUVs and trucks are far more fuel-efficient than they’ve been in the past, and it’s not like everyone is suddenly wishing they could drive 10 mpg Hummers again.

But there has been a shift to less fuel-efficient cars that’s coincided with plummeting gas prices. According to research by Michael Sivak and Brandon Schoettle of the University of Michigan Transportation Institute, in December new car purchases averaged 25.1 mpg, down from a high of 25.8 mpg in August. “These recent reductions likely reflect the large and continuing decreases in the price of gasoline,” the researchers stated.

Everything’s relative, of course. The December average of 25.1 mpg may be down compared to earlier months in 2014, but it still represents a vast improvement over prior years: The average was 24.8 mpg for 2013 as a whole, and around 21 mpg in 2008 and 2009.

MONEY Autos

Why This Might Be the Beginning of the End for the Toyota Prius

Toyota Prius
Toyota Prius Toyota

A decade ago, the Prius was the industry darling, viewed as the hip, smart choice among green celebrities and budget-conscious commuters alike. Yet in 2014, Prius sales plummeted—and cheap gas is only part of the reason why.

When Toyota released its December 2014 results this week, the automaker highlighted how—like most of the industry—sales have been booming. Toyota sales in the U.S. jumped 12.7% compared with the previous December, and they were up 6.2% for the year as a whole. The announcement also played up the fact that Lexus had its best sales month ever in December; that sales for trucks, SUVs, and the Sienna minivan were all soaring; and that the Camry held bragging rights as America’s best-selling car, a title it’s owned for 13 years running.

What’s just as interesting about the announcement is the car model that’s notably absent: Toyota Prius. The world’s best-selling and best-known hybrid vehicle, the pioneering Prius, is not mentioned in one Toyota 2014 sales press release and is downplayed in another, with only a quick line stating “we sold more than 200,000 Prius for the third consecutive year.”

Understandably, Toyota is trying to accentuate the positive in 2014 sales, so let’s turn to the auto resource site WardsAuto, which states explicitly that the Prius’s 207,372 units sold represents a 11.5% decrease from 2013. USA Today recently called on another sales data source to report that through the first 11 months of 2014, Prius sales were down nearly 16% compared with the prior year. What’s more, according to the Detroit Free Press, overall sales of gas-electric hybrids like the Prius were on pace to fall 9% for the year.

In 2013, gas-electric hybrids accounted for 3.2% of all light vehicle sales in the U.S. Last year, that figure dipped to just 2.8%. This isn’t remotely the trajectory most experts anticipated. A J.D. Power forecast made in 2008, when hybrids were 2.2% of U.S. car sales, predicted that the category would constitute 7% of the market by 2015.

What happened? The short answer is: cheap gas prices. Oil prices have plunged since summer and have just kept on falling. The consensus says that the result will be inexpensive prices at the pump for the indefinite future. According to AAA, the national average for a gallon of regular was $2.20 as of Monday, roughly $1.10 cheaper than one year ago.

The plummeting price of gasoline has surely played a big role in hot sales for SUVs and luxury cars on the one hand (Rolls-Royce had record-high sales), and the struggles of the Prius and hybrids on the other. In December, a Businessweek article argued that with $2 gas being commonplace, the Prius is only viewed as a smart financial choice by drivers “who stink at math.” Researchers factored in the upfront costs of the Prius and a similarly equipped gas-powered Chevy Cruze, and then did the math on how long it would take for the pricier Prius to pay off via savings on fuel. The answer was that with $2 gas prices, you’d have to own the Prius for 28 years to break even compared with the overall costs of the Cruze.

But cheap gas is only part of the reason why Prius sales are on the decline. Karl Brauer, senior director of insights for Kelley Blue Book, explained that “the Prius had a good thing going for several years as the ‘official’ vehicle of the environmentally conscious,” a reputation that was solidified during the 2003 Academy Awards, when dozens of celebrities arrived in chauffeur-driven Priuses. The cachet of the Prius has dissipated in the years since because, among other reasons, its fuel efficiency advantage over the competition has shrunk substantially, and Tesla has emerged as the green car of choice that’s not only environmentally friendly, but stylish and a rip-roaring hoot to drive as well.

“A lot of vehicles today get 40+ miles per gallon and you don’t have to make the sacrifices you do with the Prius,” said Brauer, pointing to the fun-to-drive Volkswagen Golf and the surprisingly spacious and practical Honda Fit as appealing, fuel-efficient alternatives to the Prius. “And the Tesla has hurt the Prius as much as anything else.”

What’s especially interesting is that while low gas prices appear to be a factor in declining sales of the Prius and other hybrids, cheap fuel doesn’t seem to be cutting into sales of some purely electric-powered cars, like the Tesla Model S and the Nissan Leaf.

A recent study conducted on the behalf of NACS, a convenience store and retail fuel association, estimates that each 10¢ drop in gas prices correlates to a 1% decrease in consumers who would consider alternative-fuel vehicles. As of November, for instance, 34% of Americans polled said they would be interested in an all-electric vehicle such as the Nissan Leaf, compared with 55% in April, when gas prices were roughly 90¢ per gallon more expensive.

And yet, curiously, while sales of the Prius and other hybrids have suffered hand in hand with falling gas prices, the Nissan Leaf has had a record year. Nissan sold 3,102 Leafs in December and 30,200 Leafs for all of 2014, up from 2,529 and 22,610, respectively, the year before. Likewise, even though the Model S wasn’t new in 2014 and had a high starting price of around $70,000, Tesla sold about as many of the models last year as it did in 2013 when it was the absolute darling of the industry.

One explanation for why sales of pure electric vehicles haven’t slumped like hybrids is that in certain circles EVs are viewed as superior in terms of environmental friendliness and just plain coolness. Then again, it must be pointed out that even as Prius sales decline, it still outsells the Nissan Leaf by a factor of nearly seven.

A 2016 model year Prius is expected to hit the market this year, and Brauer said that, in light of EVs holding the edge in terms of being the green choice, and vastly improved fuel-efficient mainstream vehicles being the smarter economic option in an era of cheap gas, Toyota faces real challenges getting sales back on the upswing. “They have to make the Prius appealing beyond the green car claims,” he said. “The ‘green’ has to be gravy on top of what’s a fun car to own and drive.”

Read next: Sony Is Bringing Back the Walkman With One Huge Surprise

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MONEY Shopping

5 Everyday Items You Paid More for in 2014—and 3 That Got Cheaper

A few of America's favorite items for snacking, cooking, and recaffeinating got a lot more expensive this year. Meanwhile, one big cost has gotten much cheaper.

Inflation causes the slow, steady rise in prices for all manner of goods and services. But the price hikes incurred by the five common expenditures below have far outshot inflation. Over the past year, chances are a much larger portion of your household budget has been allocated to the following expenses.

 

  • Olive Oil

    Bottle of olive oil
    Sue Wilson—Alamy

    Olive Oil Times noted recently that “2014 will go down as one of the worst years in recent history for olive oil production in Italy.” Production has slowed significantly in Spain and Portugal as well, thanks to a range of factors including a fruit fly infestation and a cold spring followed by a hot, humid summer—followed by hail storms. The end result is that global production of olive oil could be down as much as 27%, and prices for high-quality European olive oil are soaring: Recently, wholesale prices for extra virgin olive oil in Italy were up 121% compared to a year ago.

  • Beef

    T-bone steak on white butcher paper
    Foodcollection.com—Alamy

    Virtually all meat prices rose in 2014, thanks largely to long periods of drought in the American West colliding with increased global demand. Yet beef prices rose swiftest of all this year, with live cattle futures hitting an all-time high in November and retail prices being pushed up 18% to 20% compared to a year ago. And get this: Skyrocketing beef prices are being blamed for what appears to be the return of cattle rustlers, who presumably made off with 150 cows that were reported missing in Idaho, and that are worth over $300,000. Perhaps worst of all, bacon prices have been rising nearly as steeply as beef.

  • Chocolate

    Hershey's, Mr. Goodbar and Krackel chocolate bars.
    Kristoffer Tripplaar—Alamy

    Surging cocoa prices led both Hershey’s and Mars to raise prices by 8% or so on your favorite chocolate candy bars this year. And because the supply of chocolate appears unable to keep up with demand—which is soaring in particular in Latin America and Asia—chocolate prices are expected to keep rising going forward.

     

  • Airfare

    Airport planes
    Nicholas J. Reid—Getty Images

    The average round trip flight in the U.S. surpassed $500 in 2014, and the cost of flying domestically has been rising nearly 11% over the past five years, after adjusting for inflation. What’s puzzling—not to mention frustrating—for travelers is that base prices for flights have been soaring at a time when airline fees and airline profits are both sharply on the rise. Lower fuel prices have served to make profits even larger, and while the airlines have kept prices high thus far in the new era of cheap oil, costs have declined so dramatically that some are anticipating slightly cheaper airfare in 2015.

  • Coffee

    The Starbucks Corp. logo sits on carboard coffee cups inside a Starbucks coffee shop.
    Jason Alden—Bloomberg via Getty Images

    Starbucks, Folgers, and Dunkin’ Donuts are among the well-known coffee brands subjected to price increases in 2014. Persistent drought in Brazil, the world’s largest coffee bean producer, has been blamed as the main reason for the price hikes. And while it may seem as if coffee drinkers will pay any price to get their java fix, a recent report noting falling coffee sales from Smuckers, maker of Folgers, indicates that the demand for coffee has its limits. Meanwhile, Starbucks’ new plan focuses on a luxury retail concept, where a haute cup of Joe will run around $6.

    On the flip side, you paid less for these three expenditures in 2014:

  • Gas

    Mark Monaham, owner of the Raceway gas station in McComb, Miss., changes his fuel price billboard, Friday, Dec. 19, 2014. Gas prices throughout the region continue to fall as oil prices plummet.
    Daniel Lin—AP

    Thanks to an increase in supply and lower consumption due to more fuel efficient vehicles and other factors, gas prices launched into a slow, steady decline last summer that hasn’t really ended. The national average hit what was then a low for 2014 in early October, at $3.27 per gallon—a rate that seems quite expensive of late. Prices dipped under $2 per gallon in a few stations in Oklahoma in early December, and government forecasts are predicting a national average of $2.60 per gallon for 2015, down from $3.51 in 2013.

     

  • TVs

    A Walmart employee helps a customer with a 50" TV on sale for $218 on Black Friday in Broomfield, Colorado November 28, 2014.
    Rick Wilking—Reuters

    It’s no surprise that the price of most electronics drops year after year, thanks to increasingly lower production costs and the fact that any technology available for more than six months is deemed old and unhip—and therefore must be discounted. Even so, the dip in TV prices in 2014 has been pretty amazing. In October, the Labor Department reported that TV prices were down 14%, and that decrease of course occurred well before the rollout of super cheap TV deals on Black Friday and the rest of the holiday period. As Consumer Reports noted recently, it’s now pretty easy to find a 40-inch TV for less than the price of an 8-inch tablet.

     

  • Cellphone Bills

    Pedestrians pass a Verizon Wireless store on Canal Street in New York.
    John Minchillo—AP

    The past year brought with it more changes in cellphone plans than we’ve seen in perhaps the previous five years combined. In addition to a sharp shift toward more possibilities in “non-contract” plans, in which you’re not locked into a two-year deal, wireless providers have been especially aggressive this year in terms of rolling out new plans and bonuses in order to win over customers from the competition. In August, for instance, Verizon and Sprint both introduced significantly cheaper plans to new customers—potentially cutting one’s monthly bill by 50%. More recently, Sprint promised a new unlimited talk and text deal that would cut in half the bill currently paid by any AT&T or Verizon customer.

    None of this necessarily means that your household’s smartphone bill actually went down in 2014. But considering the increased competition and wide range of new individual and family plan offers on the table, you should be paying less. If you’re not, it’s time to start shopping around to get a better deal. You might not even have to switch providers. Sometimes it’s as simple as calling up and asking for a cheaper option.

TIME Saudi Arabia

Saudi Arabia Won’t Cut Oil Production to Boost Prices

Ali Ibrahim Naimi
Saudi Arabia's Minister of Petroleum and Mineral Resources Ali al-Naimi attends the opening day of 10th Arab Energy Conference in Abu Dhabi on Dec. 21, 2014 Kamran Jebreili—AP

Global oil prices are tanking, but OPEC is holding firm on not slashing production to buoy prices

Saudi Arabia will not cut oil production to boost depressed prices, a reversal in the kingdom’s usual policy of moderating supply to control prices and sending a strong message about the Organization of the Petroleum Exporting Countries’ (OPEC) strategy for dealing with a slumped oil market.

Saudi Minister of Petroleum and Mineral Resources Ali al-Naimi told reporters on Sunday that even if non-OPEC countries cut production, Saudi Arabia would not follow them, Reuters reports. Other ministers, including from Kuwait and Iraq, repeated the Saudi minister’s insistence on retaining steady production levels.

A boom in U.S. shale-gas production has flooded the global oil market and sent gas prices tanking.

The Wall Street Journal reports that Saudi Arabia’s refusal to cut oil production has led to speculation that the world’s top petroleum exporter could be seeking to knock gas prices even lower, testing U.S. shale-gas producers resolve to keep pumping. Saudi Arabia has denied any such plot and American officials have reiterated that the U.S. maintains close and friendly relations with the kingdom.

[Reuters]

TIME energy

Gas Stations in 24 States Drop Prices to $2 a Gallon

Mark Monaham, owner of the Raceway gas station in McComb, Miss., changes his fuel price billboard, Friday, Dec. 19, 2014. Gas prices throughout the region continue to fall as oil prices plummet.
Daniel Lin—AP

Christmas comes early for many commuters

An oil boom has pushed gas prices at some stations, as of Saturday, down to as little as $2 a gallon.

Price tracking service GasBuddy.com found that pockets of low prices below $2 have also cropped up across the country, while average prices across the U.S. are tracking at $2.43 a gallon.

“As of this morning, there are 24 states with prices under $2 a gallon,” GasBuddy’s senior petroleum analyst told USA Today.

Commuters in Missouri have reaped the biggest windfalls, with gas dropping to $1.96 a gallon in Springfield–and even lower in some outlying towns.

With Saudi Arabia’s announcement in September that it would keep the oil flowing, despite falling prices, analysts predict that gas prices have not bottomed out just yet. American Automobile Association analysts expect prices to fall by another seven cents, just in time for Christmas.

Read more at USA Today.

TIME energy

New York Bans Fracking

After years of debate in the state over the controversial drilling technique

The administration of New York Governor Andrew Cuomo announced Wednesday that the controversial drilling technique known as fracking will be banned in the state, citing concerns over risk of contamination to the state’s air and water.

“I cannot support high volume hydraulic fracturing in the great state of New York,” acting Health Commissioner Howard Zucker said. The announcement comes after years of debate over the practice, during which New York has had a defacto fracking ban in place, the New York Times reports.

Fracking employs chemicals and underground explosions to release oil and gas trapped in shale deposits that are inaccessible by conventional drilling techniques. Some environmentalists contend that fracking contaminates groundwater and can contribute to seismic activity, and that increased drilling activity can contribute to air pollution and other environmental problems.

[NYT]

TIME Economy

#TheBrief: Why Gas Prices Are Falling

The reason you're paying less at the pump

You may have noticed a lower number on your gas station receipts. The average price of gas in the U.S. is now $2.55 per gallon, the lowest it’s been since 2009. We’re told to never question a good thing, but why are these prices falling?

Watch The Brief to find out why you’re spending less than usual at the pump.

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