| Business

Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Americans can give thanks for cheaper gasoline

Email Newsletters

Sign up for one of our email newsletters.

On the Grid

From the shale fields to the cooling towers, Trib Total Media covers the energy industry in Western Pennsylvania and beyond. For the latest news and views on gas, coal, electricity and more, check out On the Grid today.

By The Associated Press
Saturday, Nov. 30, 2013, 12:01 a.m.

WASHINGTON — 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 no pay raises, whatever money they're saving on gas has freed a bit more for other purchases.

And 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.

Riccadonna estimates that breaking $3 gas would lead the average shopper to spend $47 more over the holidays. That figure would translate into $15 billion worth of extra shopping — possibly the difference between lukewarm and red-hot sales growth.

Prices briefly dipped below $3 in five states — Arkansas, Kansas, Missouri, Oklahoma and Texas — before rising above that threshold again.

Some service stations have been charging less than $3 around Tucson, Ariz., where Seth Nilson, a high school teacher, and his wife, Cristi, are enjoying more time at restaurants.

Subscribe today! Click here for our subscription offers.



Show commenting policy

Most-Read Business Headlines

  1. University of Pittsburgh researchers revisit war of electric currents
  2. Pennsylvania Game Commission reaps revenue from shale gas under game lands
  3. As historic breakup nears, Alcoa works to redefine its ‘advantage’
  4. Older workers try to cut back on hours at job
  5. Energy Spotlight: Minking Chyu
  6. Yahoo investors losing patience with ‘star’ CEO Marissa Mayer
  7. Make green home upgrades pay off
  8. Program lets public service workers be forgiven for student debt
  9. Batteries key to alternative energy’s success
  10. Paying pals digitally catches on
  11. Union leaders warn Post-Gazette newsroom of possible layoffs