Gas prices drop prior to Labor Day.

This morning, UCAN's gas survey showed that San Diego's gasoline and diesel prices have decreased by a nickel a gallon since last Friday in defiance of volatile oil and wholesale gasoline markets. The question is, will the trend continue throughout the weekend?

Today, regular unleaded averages $3.81 a gallon in San Diego, down half a cent overnight, and a decrease of a nickel since last Friday, while diesel has dropped 5.5¢ since Friday to a new average of $4.315 a gallon.

Tropical Storm Gustav could change all that. Since Monday, hurricane jitters have blown the spot price of unblended gasoline in Los Angeles up by 11 cents as of yesterday. This morning spot prices surged another 6 cents.

If Gustav heads toward New Orleans, prices could go even higher. Refineries in the Gulf of Mexico supply almost half of the USA's fuel supply, and the wild gyrations of the market have followed the "what-if" predictions and computer models that attempt to predict Gustav's path.

When Hurricane Katrina struck New Orleans in 2005, fuel shortages, and the gleeful exploitation of fears about supplies by oil companies sent prices to an all-time inflation adjusted high for gasoline of $3.06 a gallon nationally - up 46¢ in one week. 

 "Prices have dropped from the level of absolutely horrific to merely atrocious," says Charles Langley, Manager of UCAN's Gas Survey, who cautions that the possibility of a return of $4+ per gallon gasoline is a "pinch in the pipeline away."