Gas prices reach a new low; average family will save hundreds in 2015

Sharon Skeahan & Renee Kochinski, Media Editor & Feature Editor

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For weeks now, people across the United States have been witnessing low gas prices. As of January 18, the AAA national gas price average is 2.068 dollars, which is about 1.19 dollars less than the national average at this time last year. This gas price phenomenon is something that the United States has not seen since 2009, when crude oil dropped to around the same prices.

In November, Bob Darbelnet, CEO of AAA, stated, “Many Americans are spending 10 to 20 dollars less to fill up their cars on every trip to the gas station compared to what they paid during the summer driving season.”

The International Business Times stated, “Prices should remain low for at least the next half-year, likely even falling further before they rebound,” said Chad Mabry, an analyst in the energy and natural resources research department at the New York investment bank, MLV and Co.

In the United States, gas prices are broken down into different percentages, 15 percent is spent on taxes, 17 percent is used for distribution and marketing, six percent is used for refining and 62 percent is used for the crude oil. According to ABC, Tom May with MFA Oil said that “the United States is producing its own oil, which means it isn’t relying on foreign oil and the terms set by another government.” As of now, the companies are not using oil as an export; therefore, the price to distribute the oil among the states is cheaper.

One of the more thought provoking questions among American drivers is why gas prices have dropped so low. According to the Energy Information Administration, “America’s domestic oil production has grown from 5.6 million barrels per day in 2011 to 7.4 million barrels per day last year.” This number is expected to increase to 9.5 million barrels per day in 2015. Additionally, oil prices have declined to 50 dollars per barrel, an inexpensive cost when compared to last year’s price of 115 dollars per barrel.

The oil industry has invested and developed new ways to receive crude oil, the most significant example being horizontal drilling in shale. As stated by the International Business Times, “shale drilling has led a massive boom in U.S. energy production that has flooded the market with oil and driven prices to recent lows.”

In the United States, gas is an essential luxury for the functionality of our entire nation. In 2013, the average daily consumption of gasoline for Americans reached 368.51 million gallons per day. Additionally, as stated on eia.gov, the approximate amount of gas used over the course of the year was 134.51 billion gallons. The United States consumes more gasoline than South America, Europe, Africa and Asia combined.

In his State of the Union address last night, President Obama stated that the average American family will save approximately 750 dollars this year when purchasing gas.

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