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Lowest gas price in nation falls to 94 cents at one station

The average gas price could drop to $1.49 per gallon in the weeks to come due to coronavirus-related social distancing and the Saudi-Russian price war.

- 02:34
Gas pump

Prices are falling very quickly.

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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, but now, Ohio has beaten the record.

A station in Cleveland, Ohio, is now selling gas for 94 cents per gallon, GasBuddy users report. Incredibly the price is actually up from March 29, when it sold a gallon of gas for just 89 cents.

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.  As of March 30, the station's lowest gas price actually jumped to $1.04 per gallon, according to Gas Buddy, but that's still mighty cheap. 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 COVID-19, the disease the novel coronavirus causes, Saudi Arabia also initiated a price war with Russia in the crude oil market. 

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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 and shelter-in-place orders and closed venues 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 create a surplus in the supply chain. 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.

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First published March 19.