TOPICS > Economy

Ahead of Memorial Day Travel, a Timely Drop in Gas Prices

May 25, 2012 at 12:00 AM EDT
Nearly 35 million Americans will travel at least 50 miles this Memorial Day weekend, according to the American Automobile Association. Drivers will find the average price of gas is down 14 cents a gallon from this time last year and 25 cents since the end of March. Judy Woodruff reports.

JUDY WOODRUFF: Memorial Day beckoned today, and highways began to fill for the heavily traveled holiday. In much of the country, the weekend trips promised to be just a little bit cheaper this year.

Across the country, Americans filled up and hit the road, taking advantage of a timely drop in gas prices.

WOMAN: We’re going to Savannah Beach.

WOMAN: We’re traveling to Pennsylvania.

JUDY WOODRUFF: The American Automobile Association, AAA, projected nearly 35 million Americans will travel at least 50 miles this weekend, mostly driving. That’s up more than 1 percent from last year. They will find the average price of gas is down 14 cents a gallon from this time last year, and a quarter since the end of March.

WOMAN: I’m happy with $3.50, as it was $3.69 last week, $3.79 the week before that.

WOMAN: Thank goodness. I would be more excited if I thought it was something that was going to last, and I’m sure it’s not, so we will just have to wait and see.

JUDY WOODRUFF: Gas prices aren’t down everywhere. Cynthia Brough of AAA says refineries and local taxes cause variations in price around the country.

CYNTHIA BROUGH, director of public relations, American Automobile Association: Right now, we see a tale of two coasts. On the East Coast, gas prices have been coming down steadily since that high peak on April 6.

But on the West Coast, they actually went up because there were some refineries on the West Coast that had some unforeseen maintenance problems, so they were unable to keep up with the demand. Those prices seem to have peaked. And prices peaked are better than prices going up. So between the East Coast prices dropping and the West Coast prices plateauing, it’s good news for everybody.

JUDY WOODRUFF: For now, gasoline in many parts of the country is following a steady decline in the price of oil, which closed below $90 a barrel on Wednesday, for the first time since October.

Oil prices have fallen as U.S. oil inventories have been rising and as economic slowdowns in China and Europe cut into overall global demand.

CYNTHIA BROUGH: Gas prices are coming down because there have been concerns by the speculators that high oil prices will have a negative impact on the global economy, and OPEC promised a little while ago that they would increase their production.

JUDY WOODRUFF: At the same time, renewed talks on Iran’s nuclear program have eased concerns that that country’s oil output could be disrupted by U.S. or Israeli attacks. The AAA says many analysts expect gas prices to dip during the rest of the summer.

CYNTHIA BROUGH: Right now, we don’t really see anything in the global economy that leads us to believe that there is a reason for gas prices to take a sharp spike upward again.

Now, having said that, there are always unforeseen circumstances that can affect those gas prices and the price of oil, like hurricane season beginning June 1, geopolitical situations, unrest, or potentially OPEC not producing the supply that they promised.

JUDY WOODRUFF: The prices of oil and gas are always an important pocketbook issue, and will be closely watched this summer by both presidential candidates.

PRESIDENT BARACK OBAMA: As long as gas prices are going up, people are going to feel like I’m not doing enough. And I understand that, because people get hurt when they’re going to that gas station and seeing those prices rise every day.

MITT ROMNEY (R): He says something that — I think it was yesterday. He said the reason we have high gasoline prices is — and then he was seeking around. What could it be? What could it be?

JUDY WOODRUFF: During the winter, the president’s disapproval rating crept up as gas prices were rising. More than half of those responding in one poll said they think it’s within the president’s power to help bring down the price of gas.