If you've noticed gas prices falling dramatically in the last weeks, it's not unique to your city or even state. Kentucky was the first state in the US to see fuel prices drop under $1 per gallon, and the lowest price continues to flip between Kentucky and Ohio. As of April 27, two Kentucky stations sold gas for 89 cents per gallon, according to GasBuddy.
The price beats last week's price of 91 cents per gallon at a station in Cleveland, Ohio. The lowest price in Ohio is now 95 cents per gallon. However, prices dipped as low as 89 cents back in March locally.
In London, Kentucky, a BP gas station officially changed its digital marquee to advertise a gallon of gas for just 99 cents on March 19, according to Patrick De Haan, head of petroleum analysis for GasBuddy. Drivers haven't seen 99 cent gas since 2002, when travelers began to take fewer trips and stayed closer to home following the Sept. 11 terrorist attacks. Come 2003, fuel prices started to rise after the US invaded Iraq.
Fuel prices peaked in 2011 when the average price hovered around $3.80 per gallon.
Two things created the perfect storm for plummeting gas prices in 2020. While the world is justifiably focused on controlling the spread of, the disease the novel causes, Saudi Arabia also initiated a price war with Russia in the crude oil market.
As COVID-19 spread across China, mass quarantines began, which left citizens at home, off the streets and away from work. As the virus spread to Europe and North America, nations have taken similar measures and instituted lockdowns andand such as bars and restaurants. It's easy to see why there'd be a drop in demand for oil -- more people at home means fewer trips in the car.
As nations began to tackle COVID-19 in an aggressive manner, Saudi Arabia slashed prices on its crude oil, which some analysts believe could. It's a basic economic principle where more supply and less demand mean lower prices. Prices could even hit negative territory as companies run out of room to store surplus oil.
Will the entire US see gas prices drop to under a buck? It's unlikely, but drivers will certainly see far cheaper prices than they're used to. De Haan also tweeted that there's a high likelihood we'll see the average national gas price drop to $1.49, and it's possible the cost will fall lower. On March 18, De Haan counted 16 states where the lowest gas price recorded was already $1.50 per gallon.
First published March 19.