September gas prices
Average price for gallon of regular gasoline, metro Atlanta
2009 ….. $2.34
2010 ….. $2.58
2011 ….. $3.47
2012 ….. $3.79
2013 ….. $3.47
2014 ….. $3.40
Source: Gas Buddy
Metro Atlanta gas prices, the past decade
Average price for a gallon of regular
Highest —$4.02 July, 2008
Lowest — $1.47, Jan., 2004
*Average prices
Source: Gas Buddy, Energy Information Administration
How Much Gasoline Atlanta Uses
Daily gas sales in millions of gallons
Lowest ………. Sept. 2008 ……… 11.2
Highest …….. Sept. 2006 ……… 12.7
Most recent ….June 2014 ……….12.3
Source: U.S. Energy Information Administration
The commute from her home in Kennesaw to her office near Perimeter Mall, is long – about 28 miles one-way – so to give herself a fighting chance of picking up the kids by 6 p.m., Loretta Rieman arranges to start her nine-hour workday early.
Sometimes that works.
But that doesn’t help with the cost of making the trip in her 17 mile-per-gallon Jeep Commander. She needs to fill it with gasoline about six times a month and budgets about $650 to pay for it. When gas prices were higher, she found herself giving up weekend trips to compensate.
“I’ll go a little out of my way to get the cheapest gas,” said Rieman, 34. “For my next vehicle, I will consider something more fuel-efficient.”
Gas prices matter in Atlanta, where so many people drive so far or spend much time not moving much at all – while still burning gasoline. So it is good news for consumers and the economy that gasoline now, averaging less than $3.40 a gallon in metro Atlanta, is cheaper than it has been in the past three Septembers.
Four years ago, with the economy struggling out of recession, the price of gasoline in metro Atlanta averaged $2.58 a gallon. The September before, it was $2.34 a gallon.
Barring another economic crash, prices are not expected to dip that low, but they are likely to keep sliding at least for the next couple of months, said Gregg Laskoski, senior petroleum analyst at Gas Buddy. “And when we talk about states where you could see gas prices below $3 a gallon – Georgia is on that list.”
In fact, one outlet in Ringgold already had $2.98-a-gallon gas late last week, although the lowest prices in metro Atlanta were about 20 cents higher, according to Gas Buddy.
Oil accounts for most of the price of gasoline, and crises generally mean higher prices in oil. But not this time, despite Israel’s war in Gaza, the virtual elimination of oil production from Syria and Libya and the surge of the so-called Islamic State, which has threatened Iraqi oil fields.
Yet as those events should have rattled markets and crimped supply, other forces have been pushing oil prices down since late June.
On the supply side, several countries – especially the United States and Canada – have been pumping more oil onto world markets. Meanwhile, the European and Chinese economies have struggled and growth in U.S. energy demand has been weak.
Global events aside, there is a yearly pattern for prices. Production of gasoline has also turned an important corner: Refineries have switched to “winter gas” from the more expensive blends they are required to make in summer.
Combine all that with consumer habits and you see prices falling through the fall, Laskoski said. “The refineries are producing cheaper gas just as consumer demand is also declining. During the fourth quarter of the year, U.S. demand for gasoline is about 12 million gallons a day lower than during the summer.”
The trend typically reverses after the holidays, and gasoline prices go up for several months, often peaking in late spring. This year, for example, metro Atlanta gas prices hit their high of $3.72 a gallon on April 20, according to Laskoski.
The economy is less vulnerable than it used to be since the energy-intensive manufacturing sector is smaller and more efficient – and so are most of the nation’s vehicles.
But it still hurts.
Although other factors were often involved, most recessions since World War II have been preceded by increases in energy prices. Most recently, as the economy tipped into a recession in 2007 and 2008, gas prices roared to a high of $4.02 a gallon in metro Atlanta – and many stations were charging more.
With prices posted prominently at gas stations, it’s hard to avoid knowing when they go up. And with the vast majority of residents depending on gas-burning cars to get around, it’s hard to avoid paying the price.
For instance, Ian Branam drives nearly 30 miles from his home to Decatur each workday.
He would consider buying a more efficient vehicle, but not right away, since he recently spent $1,500 on a new transmission for his 1998 Honda. Meanwhile, he pours about 15 gallons into the gas tank each week – a $48 investment at $3.20 a gallon, the cheapest price at stations near his Lawrenceville home.
“Definitely, I think about it when I pump and I see all that money going out of my pocket.”
The result is that higher prices chill both consumer and business spending.
The effect may not work in reverse, said Roger Tutterow, director of the Econometric Center at Kennesaw State University. “I don’t know if the psychology of lower prices is as positive as the negative of higher prices. But the good thing is that a higher gas price is a negative that is off the table.”
The overall economic impact may also be muted, said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University.
First, because prices are not all that low – in the late 1990s, gas prices in Atlanta were well under $1 a gallon. But consumers have also changed their habits, he said.
In the past decade, there has been limited income growth – and many households have seen declines in their spending power. Moreover, many consumers had their net worth savaged by the housing bubble burst and have not recovered.
When people can borrow, they often do, but for day-to-day spending they have a more conservative outlook, Dhawan said.
“There is a trend in the economy that consumers may still be buying big things like cars but they are more frugal on the small purchases. It’s a positive, but not as big a positive as it would have been pre-2008.”
“It is also about expectations. Nobody expects gas prices to go back to $2. So this decline won’t change behavior. They’ll have $20 here, $20 there and that’s good, but it won’t have a huge impact.”
