MONEY

Gas Prices Hit Lowest Level In 2012

12/18/2012 11:32 am ET

For drivers all across the country, Christmas has come early.

The average price of a gallon of regular gas fell to $3.24 on Tuesday, its lowest rate this year, according to AAA. The organization noted that today's gas prices are approaching some of the lowest rates of 2011, seen in December and February of last year.

Gas prices have been falling consistently throughout the winter months as America's “appetite for gasoline” continues to decrease, said Tom Kloza, chief oil analyst with the Oil Price Information Service.

Kloza told The Huffington Post that there are multiple reasons why Americans are driving less, including unemployment and shifting generational attitudes toward driving. The result, he said, is lower gas prices.

In addition to a decreased demand for gas, Kloza said the looming fiscal cliff is encouraging investors to pull their money out of oil and other commodities, furthering lower prices at the pump.

“If we go off the cliff, gasoline will get hammered and prices could go even lower,” Kloza said. “That is the big wild card.”

The fiscal cliff remains the "elephant in the room" when it comes to future gas prices, said Avery Ash, a spokesman for AAA. If a deal is reached by the end of the year, Ash told HuffPost, there is some expectation that the economy could be bolstered -- leading to an increase in gas prices. That said, Ash predicts any deal's impact on gas prices to be limited by global economic concern.

Despite heavy speculation that Hurricane Sandy would lead to a significant uptick in prices at the pump, rates continued to drop during the disaster. The storm forced the idling of around 70 percent of oil refineries on the East Coast, according to IHS Global Insight.

Drivers saw record-breaking gas prices over the summer months, with several Gulf Coast refineries forced to close down or slow production due to Hurricane Isaac.

Prices eventually began their seasonal slide in October and have continued to fall throughout the winter months. Gas prices traditionally fall after the summer months as refineries can switch to cheaper fuel blends, Ash said.

Looking ahead to 2013, Kloza said he guesses that Americans will use about 1 million fewer barrels per day of gas in January than they did in August of 2012.

Also on HuffPost:

What Consumers Cut To Save On Gas
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