Labor Day Gas Prices: Labor Day Gas Prices Lowest Since 2004, This Labor Day customers are likely to pay the lowest gas prices since 2004, according to the American Automobile Association.
On Friday, the national average price of gas was $2.42 per gallon – a dollar less per gallon than a year ago. US consumers should save more than $1bn on gas this weekend compared to 2014, according to AAA, which estimates drivers could save between $15 to $25 on every trip to the gas station.
“It is unbelievable that drivers are ending their summer vacations with the lowest gas prices for this time of year in more than a decade,” said AAA spokesman Avery Ash.
In August, the average gas price was about $2.60 a gallon, the lowest average for the month since 2005 and 15 cents less per gallon than the July average.
If gas prices drop after Labor day, which is usually the trend, AAA expects they could fall below $2 per gallon by Christmas.
– AAA (@AAAnews) September 4, 2015
Average gas prices in South Carolina have dropped below $2 per gallon! It’s the first state under $2 since February.
“Gas prices in many parts of the country could fall below $2 per gallon by Christmas if the cost of crude oil remains low,” said Ash. “There is a good reason to believe that cheaper oil costs, a seasonal decline in driving and the switchover to less costly winter-blend gasoline will continue to push down prices through the end of the year.”
AAA found that currently more than 5% of US stations are selling gas for less than $2 a gallon. On Friday, average gas prices in South Carolina dropped below $2 a gallon and average prices in Alabama and Mississippi are expected to follow in the next week. The last time prices dropped below $2 a gallon was in February in Idaho and Utah.
Cheap gas does not come without a cost. At the end of July, Shell announced that it was going to cut 6,500 jobs by the end of 2015 to deal with the slump in prices. And Continental Resources, an Oklahoma oil company that tracks layoffs, found the US had cut at least 91,000 jobs in the energy industry since last summer.
The US Department, however, said the upside is that the low gas prices are basically a tax cut for Americans who drive.
“We are always concerned when people lose jobs in this country, but I think the flip side of that is that the US is producing more oil and gas than it ever has. It’s exporting more than it ever has,” Chris Lu, US deputy labor secretary, told the Guardian. “Because of that another global trend – the price of gas has dropped and it essentially translates into a tax cut for Americans who are driving cars.”
According to the United Steelworkers union, not all oil workers have been affected. For example, a limited number of oil refinery workers have felt the effects of job cuts in their field.
“The US oil refineries are doing a booming business because of the low cost of crude oil feedstock,” said Lynne Hancock, spokeswoman for the United Steelworkers union, which represents oil refinery workers and a few oil exploration and production workers.
“They are operating at a high utilization rate and are earning profits selling refined oil products. The refining sector is boosting the oil companies’ profits. The US chemical sector also has benefited from low natural gas prices from fracking.”
Hancock added that while many oil exploration and production workers have been laid off, engineers are in high demand at refineries and chemical plants.
“Those with lesser skills might have job opportunities in the retooling of refineries to handle the light, sweet crude from fracking and the expansion of capacity at these refineries,” she said.