Metro Atlanta gas prices continue to fall

For metro Atlantans, who have seen gas prices top $4 a gallon, the decline is a welcome respite, a reason to smile, some extra pocket change. And these days, they'll take it.

Analysts hope the cheaper gas boosts consumer confidence and jump-starts spending.  But amid so many negative signals -- high unemployment, widespread foreclosures and Wall Street's losses --few people seem to believe that the easing of prices at the pump portends an economic rebound.

"People are still leery," said Jessica Brady of AAA Auto Club South. "They see how volatile the market is. They're still being frugal."

Some consumers dismiss yo-yo gas prices as a a game the oil companies play to inure the public to higher prices.

"I think they'll go back up again," said Pauline Mazure, 83, shopping in the Kroger shopping center near Alpharetta. "This is just to tease us."

As of Monday, the price of regular gas had fallen to a metro Atlanta average of $3.59 a gallon, a drop of 38 cents from the peak average this year of $3.97 in April, according to atlantagasprices.com. The drop is due to a decrease in crude prices and gas companies purging their winter blend of gas before replacing it with the summer blends, analysts say.

The cheapest  price Monday was $3.42, at several locations in Cobb County. The highest price was $3.99, all at midtown Atlanta locations.

The average price nationally has dropped about 17 cents over the past three weeks, according to the Lundberg Survey of fuel prices.

Analyst Trilby Lundberg said the average price nationally for a gallon of regular was $3.74; the national average for a gallon of mid-grade is $3.89. For premium it's $4.

Jackson, Miss., had the nation's lowest average price at $3.41. Chicago had the highest at $4.29.

Gas prices do strongly influence consumer confidence, said Dan Ariely, a professor of behavioral economics at Duke University. Unlike many other purchases, gas prices stare people in the face everyday. Consumers drive by gas stations comparing the price signs, and stand beside the pump watching the dollars add up.

Consequently, people's emotional reaction to the up-and-down prices may outweigh the true impact on their finances, he said. A person buying gas at $3.50 a gallon, versus $4,  saves $10 filling up a 20-gallon fuel tank.

"It's all relative. When the price is no longer $4 a gallon, it's a relief," Ariely said. As people's anxiety abates, they may back off on cost-saving measures, making more shopping jaunts and spending a bit more freely.

For Ali, the concert-goer, the decline in prices is reason for optimism.

"It's a good starting point,' said Ali, who works for a nonprofit community organizing group. "It's a good indicator."

It remains unclear how long these lower prices will stick around, or how low they will go. Brady, of the AAA, said prices could inch down a bit more.

Or prices could rise in coming months because the members of OPEC recently failed to agree on increasing the output to meet the growing demand. World oil demand is expected to outpace supplies later this year by the widest margin since 2007, according to an Associated Press report.

"If they don't come to an agreement, prices could come back up in the fall," Brady said.

If they head back over the $4 mark, Dave Hart said he'll think about buying a more gas-friendly vehicle.

Hart spent Friday morning packing his Toyota SUV and gassing it up before driving his family to the mountains of Highlands, N.C. The big vehicle can take as much as $80 to fill up. Hart, 48, who works in marketing, actually bought it when gas prices were relatively high and dealers were looking to unload these behemoths.

For now, he's relishing the lower cost of filling it up.

"It certainly makes you feel better," he said.