For months, American drivers have enjoyed near historically low gas prices, with the national average dropping to only $1.89 per gallon.
Even President Barack Obama sees the benefits of low gas prices, commenting “gas under two bucks a gallon ain’t bad,” in last week’s State of the Union speech. Behind the huge drop in gas prices is an even bigger collapse in the price of oil, from more than $100 a barrel in 2014 to just under $30 a barrel this week.
So plan that road trip, America. Gas prices are at historic lows and could even keep declining, which is already having several surprising side effects.
3: It Will Become Easier To Save Money
“Lower gas prices mean that the cost of transportation and heating will be lower,” Alexander Goldstein, founder and CEO of Eligo Energy told The Daily Caller News Foundation. “It is no surprise that consumers will save the money that they aren’t putting into their gas tanks. According to recent studies, Americans saved 5.5 percent of their income in November because they spent less money on utility bills and gas….A fall in oil prices is effectively like a free tax cut.”
U.S. consumers spent $370 billion on gasoline in 2014, meaning a 28 percent price drop is equivalent to a $102 billion tax cut. Low prices at the pump are enormously beneficial to American households who can now use money not spent on gasoline to save more, pay down debt, or buy other goods.
American households are expected to save $700 to $750 at the pump this year, according to analysis by the Energy Information Administration.
Read the full article at Low Gas Prices