NEW YORK — A sharp decline in the price of oil this month is making gasoline cheaper at a time of year when it typically gets more expensive. It's a relief to motorists and business owners and a positive development for the economy.
Over the past three weeks, the price of oil has fallen by 9 percent to $89 a barrel. That has helped extend a slide in gasoline prices that began in late February. Nationwide, average retail prices have fallen by 27 cents per gallon, or 7 percent, since Feb. 27, to $3.52 per gallon. Analysts say pump prices could fall another 20 cents over the next two months.
The price of oil is being driven lower by rising global supplies and lower-than-expected demand in the world's two largest economies, the United States and China. As oil and gasoline become more affordable, the economy benefits because goods become less expensive to transport and motorists have more money to spend on other things. Over the course of a year, a decline of 10 cents per gallon translates to $13 billion in savings at the pump.
Diesel and jet fuel have also gotten cheaper in recent weeks, which is good news for truckers, airlines and other energy-intensive businesses.
"It makes a big difference to my bottom line," says Mike Mitternight, owner of a heating and air conditioning service company in Metairie, La. He has five pickup trucks that can burn $1,000 of gas per week when prices are near $4 a gallon. Lately he's been paying as little as $3.19, and saving $200 a week.
Gasoline prices typically rise in the late winter and spring as refiners shut down parts of their plants to perform maintenance and begin making more costly blends of gasoline required by federal clean-air regulations. The trend was earlier and less dramatic this year. Pump prices only came within 15 cents of last year's peak.