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Give thanks for falling gas prices

Average gas price tumbles 49 cents, on track for the lowest since 2010

Posted: November 28, 2013 2:00 a.m.
Updated: November 28, 2013 2:00 a.m.
 

No one begs Santa Claus for cheaper gasoline. Yet falling gas prices are shaping up as an unexpected gift for drivers — and for people on their holiday shopping lists.

The average price of gasoline has tumbled 49 cents from its peak this year to $3.29 a gallon, putting it on track for the lowest average since 2010, according to AAA. Because many Americans have had nopay raises, whatever money they’re saving on gas has freed up a bit more for other purchases.

Gas prices in California continue to be above the national average, standing at $3.56 per gallon of regular, unleaded gasoline, according to AAA’s Daily Fuel Gauge Report.

Gas prices have fallen roughly 16 cents per gallon in the last month and are about 18 cents below what they were last year, according to the report.

In the Santa Clarita Valley, prices are largely lower, generally ranging from $3.39 to $3.53, according to GasBuddy.com, an online price-tracking service.

History shows that when gas prices drop, consumers become more likely to splurge on dinners out. Impulse buys at the mall seem like less of a stretch. More people buy a gas-station gift card after fueling up.

Many retail analysts have forecast a ho-hum sales gain of around 2 percent this year; others predict an increase of up to 3.9 percent. But steadily cheaper gas could send holiday sales shooting above 5.4 percent, analysts say.

“Every little thing moves the needle at this point,” said Carl Riccadonna, senior U.S. economist at Deutsche Bank.“The benefit at this time of the year certainly helps retailers, since it is not spread evenly throughout the year.”

Tom Kloza, chief oil analyst at the Oil Information Service, foresees the average price drifting down, as it typically does this time of year, to as low as $3.05 by year’s end.

For retailers, the best-case scenario would be for the national average to breach $3 a gallon, a psychological barrier that could help accelerate spending.

Cheaper gas could help build on the momentum of 2 million more Americans finding jobs this year. It might also help shore up consumers’ fragile confidence in an economic recovery that’s lumbered along for 4½ years.

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