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Are $2/Gallon Gas Prices On The Horizon?

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If a number of factors fall into place, motorists could be enjoying another round of lower gas prices in time for summer vacations.

AAA South in Tampa says gas prices are falling at the rate of about $0.05 per week, on pace to be about $0.40 per gallon lower than right now. But Mark Jenkins at the Auto Club adds that there are no guarantees, with a lot of factors playing into fluctuations.

“Of course, refinery maintenance would have to end smoothly,” said Jenkins. “Crude oil remains relatively cheap. There’s a good possibility the price of oil could fall within the next several months. If that does happen, then we definitely will see a decline at the pump as well.”

Many of the refineries and wholesalers are also switching to more expensive summer-blend gasoline by May 1 to meet EPA clean air regulations.

The framework of a nuclear deal reached with Iran last week, says Jenkins, could lead to more oil entering a global market that’s already seeing a glut.

“It’s an agreement that likely would take 6-12 months before we’d see the impacts of it fully felt,” Jenkins said. “It could introduce about 500,000 barrels of oil per day into the global oil market."

Self-serve regular averages $2.37 per gallon in the Pensacola area as of Tuesday according to AAA. That’s unchanged from last week, and $1.16 less than a year ago.

AAA estimates that American households are saving upwards of $400 million per day on gas, compared to a year ago. Jenkins says lower gas prices this summer driving season would also benefit non-oil-related businesses, such restaurants, hotels and tourist attractions.

“Lower gas prices means more money in people’s pockets,” said Jenkins. “Right now people are saving about $15-30 for a full tank of gasoline. So when people have more disposable income, that means they’re more likely to spend that money on travel, dining out, or even shopping.”

One other factor that could throw a wrench into dropping gas prices would be a hurricane or tropical storm developing or moving into the Gulf of Mexico, which would necessitate the evacuation of thousands of oil and gas rigs.

The cost of crude oil is likely to be the most important factor influencing gas prices over the next few months. Light, sweet crude continues to hover around the $50 per barrel mark on the New York Mercantile Exchange.