The drop in gas prices is especially welcome to folks like Tony Badella, who drives a pickup and lives out of town. He says, "We live up in Shaver so coming down here and seeing this is really nice."
Tony paid $3.92 a gallon for gas at the Von's station at Herndon and Fowler in North Fresno. But that's a discount price for those who shop at the grocery store. The lowest prices at other gas stations in the Fresno area was $3.99 for a gallon of unleaded regular.
Economist Scott Case says prices are likely to keep going down because the price of crude oil is falling, and that's because investors are figuring the oil boom is over. He says, "I think there was probably a speculative bubble in the price of crude oil and as with most markets they will eventually come around to equilibrium, and it's just taken awhile to deflate that bubble."
Crude oil dipped to $118 a barrel Wednesday. If it drops to $ 117 it will trigger an automatic computer controlled sell off of oil contracts by investors, further dropping the price of oil and gas.
Case says, " I think there's already at least another ten cents at least going down built in to the prices right now, it just takes awhile for them to filter into the stations, but as long as crude oil continues to go down we're going to see prices go down at the pump."
While drivers should be happy, they're also a little leery of getting too excited. Asked if she thought the gas price crisis is over, driver Sonya Skelton said, "No. I think it's a teaser. "
Skelton adjusted to high gas prices by trading in her Toyota Sequoia SUV for a more fuel efficient Honda sedan, and says, even if prices do drop, she's not going back to an SUV.
"I wouldn't. I wouldn't drive a big car anymore."
Tony Badella says he's cut down on driving his truck as much as he can, and while he appreciates the price drop, he figures high gas prices are here to stay.
"I think this is the lowest it will ever get again." He says.
Economists say while drivers have reduced gas consumption, the biggest factors in the price drop is the dip in speculation by investors, and the slowing world economy, which was caused by high oil prices in the first place.
The projections are for further price declines, but, that could change overnight if there's a military or political crisis in an oil producing area, a fire at an oil refinery or if a hurricane hits offshore wells.
Nationwide the price of a gallon of gasoline dropped to $3.86 a gallon. Much lower than the average price in the Central Valley.
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