WALNUT CREEK, Calif. – The price at the pump has dropped by double digits in most metro areas across Northern California, according to the latest report from AAA Northern California, which tracks gas prices as a service to consumers.

According to AAA, all but five Northern California metro areas tracked by the organization saw those big drops over the past month.

The Golden State’s average for a gallon of regular, unleaded gasoline is $3.81, down 14 cents since last month’s AAA report on September 13.

For perspective, that’s 72 cents higher than California’s average price on this date last year.

Among all 50 states, California has the third highest state average price for regular, unleaded gasoline. Hawaii is first and Alaska is second.

Northern California gas prices are now averaging $3.80, down 13 cents from last month.

In the San Francisco Bay Area, motorists can expect to pay an average price of $3.90, which is a 10-cent decrease.

The national average price of $3.40 is down by 24 cents, which is 59 cents more than the national price on this date last year, when it was $2.81.

“Increased demand for gasoline and oil has helped to stall out recent price drops at the pump,” explained AAA Northern California spokesperson Matt Skryja. “In addition to demand, positive jobs numbers in the U.S., optimism about correcting debt issues in Europe, and a weaker U.S. dollar have all helped to bring a slow halt to dropping prices. As economies do better, or appear to do better, that typically drives up oil and gas prices as investors buy more of these commodities in anticipation of increasing demand.”

Commodities are priced and traded in U.S. dollars. So, as the dollar value weakens relative to currencies abroad, the effective price of these products (including crude oil) becomes cheaper. Oil futures become a more attractive investment and prices are pressured upward.

The recent decline in prices was driven by global economic malaise, including continued euro zone debt concerns and relative recent strength in the U.S. Dollar.

Those forces are now in reverse, or appear to be in reverse. Even the appearance of a reversal is sometimes enough to influence investor buying behavior. This is important, because in recent years investors’ buying behavior has largely driven where pump prices have gone.

The least expensive average price in Northern California can be found in Ukiah where regular is $3.71.

Of all the metro areas in Northern California where gas prices are tracked by AAA, South Lake Tahoe has an average price of $4.00, the highest in Northern California. This is also the highest price in the lower 48 states.

The least expensive gasoline in the country is found in both the Springfield, Missouri, and the Greenville-Spartanburg-Anderson, South Carolina, metro areas.

The average price of gas in both areas is $3.10. Wailuku, Hawaii, holds the dubious crown for the highest average price in the nation, at $4.44 per gallon.

AAA now offers text alerts via mobile phone for low gas prices in your area. Sign up at www.aaa.com/gas.

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Written by: Editor

Published: 12 October 2011