At some stations, gas falls below $2 a gallon

By BRADLEY J. FIKES - Staff Writer Thursday, November 20, 2008

Gasoline prices have broken below the $2.00-a-gallon barrier in some parts of San Diego County. And they could drop 5 cents or more by Monday, said veteran local gas watcher Charles Langley.

The lowest North County price on Thursday was $1.959 per gallon, according to the gas price survey Langley regularly compiles for the North County Times. That price was charged in Ramona by Ramco on Highway 78 east of Magnolia, and Mohsen's in Oceanside on Mission Avenue at Airport Road.

North County's average gas price was $2.253 per gallon, said Langley, a consumer advocate for the Utility Consumers' Action Network, a San Diego-based group.

Consumer buying power ---- or rather consumer refusal to buy ---- is the cause of the unexpectedly steep plunge, Langley said. Drivers have been cutting back on gas consumption faster than refineries were reducing gas production.

"With slack consumer and business demand, (refineries have) overproduced again and the market is flooded with surplus gasoline," Langley said. "The per-gallon 'spot' price for raw, unblended 84 octane gasoline dropped below $1 day ---- a huge psychological price-point."

In North County, every single station lowered its prices this week, Langley said. The drop was significant: The average price in North County was down almost 20 cents from a week ago.

The continued drop in prices is leaving drivers, especially of large vehicles, with considerably more money left over when they fill up the tank.

Marie Aviles said she was happy with the $31.92 tab for filling up her 2005 Ford Explorer at the Ronco station on East Washington Street in Escondido.

"I was paying $50 and $60 to fill up" in summer, said Aviles, an Escondido resident, on Thursday afternoon.

Nationwide, retail gas prices were already below $2 in nearly half the country, and oil prices on Thursday fell to levels not seen in more than three years on dour economic reports suggesting a painful economic pullback.

Benchmark crude oil fell as low as $48.50 a barrel on the New York Mercantile Exchange, levels last seen on May 18, 2005, when oil hit $46.80 a barrel.

Gasoline prices have been halved since reaching a record above $4 in July, but relief from record crude prices has come amid a global economic meltdown.

Light, sweet crude for December delivery fell 7 percent, or $4, to settle at $49.62 in Nymex trading.

Oil prices have fallen 66 percent since reaching a record $147.27 a barrel in mid-July.

Oil analyst Stephen Schork wondered if $50 would even hold.

"Maybe $50 is too conservative given the putrid, putrid look at the economy," he said. "If we're not out of these doldrums nine months from now we're looking at $30 oil."

The Associated Press contributed to this article.

To find gas prices in your neighborhood go to nctimes.com/gas_prices.