As gas prices drop local oil companies start feeling the pinch

FRESNO, Calif. (KFSN) -- From across the nation to right here in the valley gas prices are falling. While that's great news for drivers it is bad news for others.

2016 is off to a great start for consumers thanks to oil prices dropping below $30 a barrel. That means cheaper gas prices. "We do have a large population of lower income people, and for them not having to pay money out their pockets for gasoline, as much money-- it is like a big bonus to them," said Henry Nishimoto, Fresno Economist.

But it is not just the valley seeing lower prices at the pump.

Gas buddy.com said the national average for a gallon of gas is at $1.83. Fresno checks in at $2.43 down from last year. Economic expect Nishimoto said an increase of global production and a slight drop in demand is driving prices down and that's good news for most of the local economy. "People that are able to save money on gas they spend it on other things almost all of it. And so it benefits our retail stores, our restaurants, hardware stores, on and on and on."

"The drop in oil prices has been good for consumers, the economic benefits haven't stretched to energy producers, our industry has seen a number of layoffs in the extraction business," said Sabrina Lockhart.

The California Independent Petroleum Association said workers at Central Valley oil fields are being laid off due to the change in gas prices. But it is not just job losses that are a concern with local oil companies but lower tax revenue as well. "Companies pay a per-barrel tax which is included in their property tax for oil. So when the prices of oil drop, the amount of taxes, property taxes paid to local counties suffers as well," explains Lockhart.

The CIPA said it is too early to tell how much that will impact each county, but Nishimoto said seeing gas near two dollars a gallon could continue through the spring.