Filling up with gasoline in the U.S. is the cheapest it’s been in a decade and yet way too expensive.
Bloomberg reported that the average retail price in the U.S. dipped to $2.595 a gallon on Sunday, down 7 1/2 cents from the previous week and the lowest for this time of year since 2004, according to Heathrow, Florida-based AAA, the nation’s largest motoring group.
The drop in gasoline prices has been a boon to new light-vehicle sales in the U.S., notably SUVs, pickups and crossovers, this year.
Costs are sliding on the back of oil futures tumbling for eight consecutive weeks, the longest drop since 1986. Given that crude oil prices traded as low as $37.75 a barrel on Monday, gasoline should be a lot cheaper.
Since AAA started tracking prices in 2004, retail gasoline has only twice been above $2 a gallon while crude was under $40. Prices at the pump are now almost three times as high as oil on a per-barrel basis, the biggest gap on record.
There are a couple reasons for the disconnect. Summer gasoline is more expensive than winter fuel because of clean-air regulations.
There’s also been a string of refinery fires and breakdowns in recent weeks that have reduced fuel production in some areas.
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