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Gas prices hit $1.99

Posted on Wednesday, December 31, 2014 at 2:05 pm

Untitled-7Many Vandalia area residents woke up to a nice surprise on Christmas Eve when they drove through Vandalia in their vehicles and saw every gas station sign with the price of $1.99 per gallon for unleaded.
Abel’s, Pickadilly, and 54 Package Store each set their prices below the $2 mark for the first time in what seems like forever.
Even diesel was reaching as low as $2.75 per gallon.
Just three years ago, drivers were bracing themselves for the possibilities of paying near $5 per gallon at the pump in some states.
Those days are long behind American drivers now and it may stay that way. According to Gasbuddy.com, at least one gas station in 33 states is selling unleaded gas for under $2 per gallon.
The national average is now $2.31 per gallon.
Economy experts offer many suggestions as to why fuel prices are currently where they are for drivers.
One major reason is shale oil production.
According to the Congressional Budget Office, the cost of what is known also as “tight oil” or “shale gas” has become competitive with the cost of oil and gas extracted from other sources.
The shale oil is now equal to 30% of the U.S. production of liquid fuels (crude, biofuels) and 40% of U.S. production of natural gas.
Meanwhile, Saudi Arabia is trying attempting to remain competitive with shale oil production at the same time it deals with supply issues due to current violence in the Middle East.
Another reason for decrease is more fuel efficient cars at the same time several residents in the inner cities are utilizing public transportation.
Given all of these factors, economists are expecting much of the same for 2015.