Gas price experts: Fuel could drop as low as $3 per gallon
For every penny gasoline is cheaper, Art Wolf estimates he saves about $200 a year at his Cape May County taxi business. In South Jersey on Tuesday, gas was nearly 23 cents cheaper than one month ago, with one analyst predicting gasoline could reach the $3-per-gallon mark in New Jersey this winter.
But the owner of Aart's Cape May Taxi is not overly excited, given major fluctuations over the past five years.
"I'm pretty much resigned we're going to pay what we're going to pay," said Wolf, who started his four-taxi business 13 years ago when gas was slightly more than a dollar per gallon.
"When it went up a couple of years ago, we did a surcharge, but it just stayed up so we adjusted our rates in 2010 and kept the price. ... Gas is up and down but it's going to be over three bucks," said Wolf, of the Cold Spring section of Lower Township.
A gallon of regular gas averaged $3.28 on Tuesday in Atlantic and Cape May counties, according to AAA's Daily Fuel Gauge report. Local gas averaged $3.51 a month ago and $3.80 one year ago.
Year over year, the difference means South Jersey motorists are spending $5.20 less to fill up a 10-gallon tank than they were a year ago.
Motorists who feel their wallets a little fuller can partially thank Gulf Coast refineries for a plentiful supply, which is packing the pipeline from Texas to Linden, N.J., along New York Harbor, said Tom Kloza, chief oil analyst for GasBuddy.com, a price comparison website owned by the Oil Price Information Service.
But there is also less demand for fuel, driven by tentativeness over the U.S. economy exacerbated by federal government furloughs.
"People vote on where they see the U.S. economy going with their gas tanks," Kloza said. "When there's a lot of optimism about the economy recovering, you will see it manifest in higher purchases and higher gas demand."
Kloza predicts the average price in New Jersey may get close to $3 a gallon in the period between Election Day in early November and Martin Luther King Jr. Day in mid-January -- when prices are historically among the lowest of the year.
In the U.S., average gasoline prices peaked on July 17, 2008, when they reached $4.11, according to AAA. The region flirted with the $4 mark but never quite reached it. The record high for Atlantic and Cape May counties was $3.997 on June 17, 2008.
Years of high gasoline prices have not only affected how people drive, but also what vehicles they rent, said Brad Simon, owner of Galloway Township-based Just 4 Wheels, a car, truck and van rental business with nine locations.
Their most popular rental is a fuel-efficient Toyota Corolla. The rising cost of fuel over the years drove more people away from sports utility vehicles, a prior preference for short-term rentals, Simon said.
"People would have wanted to drive something different than what they owned -- an expensive SUV or a large van. They would have wanted to pretend for a day or two they were a king in a fancy car," he said.
"People are much more conscious of how they spend money, I think that's the biggest thing," he said.
