The price of gasoline is now sitting at its lowest point in the better part of a decade even as new crises ripple through the key oil producing regions of the Middle East
Gas prices continue to drop to multi-year lows, with average price of $1.93 per gallon representing the cheapest average price at the pump since March 23, 2009, according to surveys by AAA.
They have fallen for 55 of the past 66 days for a total savings of 26 cents per gallon and should remain relatively low because there is more than enough oil and gasoline around the world to meet demand.
Drivers are saving three cents per gallon on the week, five cents per gallon on the month and 17 cents per gallon versus this same date last year, AAA reported.
The impact of the lower gasoline prices has unsettled Wall Street, which is increasingly worried about the overall health of the oil industry not only in the U.S., but around the world. The falling price of oil has also contributed to uncertainty in the global economy, which is more dependent than ever on China where growth has slowed substantially during the last 18 months.
The auto industry also is scrambling to adjust to the lower fuel prices.
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Fuel economy of vehicles sold in calendar year 2015 fell slightly compared to 2014, according to researchers at the University of Michigan Transportation Research Institute.
The average fuel economy or window-sticker value) of new vehicles sold in the U.S. last year dropped to 25.3, down 0.1 from the value for the vehicles sold in 2014. During December, fuel economy was 24.9 mpg—down 0.2 mpg from the revised value for November.
“This decline likely reflects the continuing drop in the price of gasoline in December, and the consequent increased sales of pickup trucks, SUVs and crossovers,” said Michael Sivak, a research professor at UMTRI.
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Overall, fuel economy is down 0.9 mpg from the peak reached in August 2014, but still up 4.8 mpg from October 2007—the first full month of monitoring by Sivak and colleague Brandon Schoettle.
In addition to average fuel economy, Sivak and Schoettle issued a monthly update of their national Eco-Driving Index, which estimates the average monthly emissions generated by an individual U.S. driver. The EDI takes into account both the fuel used per distance driven and the amount of driving—the latter relying on data that are published with a two-month lag.
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With lower gasoline and diesel prices taking some of the intensity out of the debate, emissions are looming as a major reason for tight regulations on the amount of fuel burned by vehicles. During a visit to Detroit this week. Anthony Foxx, the U.S. Secretary of Transportation noted, that fully one third of the emissions that contribute to global warming come from the transportation sector.