Why Gas Might Fall Below $1 Per Gallon This Year

Nine states are currently experiencing the lowest average gas prices in 12 years, GasBuddy reports today.

The price-tracking website even states that 99-cents-per-gallon gas is “becoming a strong possibility.”

Patrick DeHaan, senior petroleum analyst for GasBuddy, says that he “wouldn’t be shocked to see a few stations in these states as low as 99 cents a gallon.”

The nine states that are now seeing the lowest average gas prices since early 2004 are:

1. Oklahoma ($1.37)
2. Indiana ($1.45)
3. Kansas ($1.46)
4. Ohio ($1.47)
5. Michigan ($1.49)
6. Minnesota ($1.52)
7. Wisconsin ($1.54)
8. Illinois ($1.57)
9. North Dakota ($1.63)

The national average is $1.728 per gallon as of today, according to AAA.

CNN Money reports that falling prices at the pump stem from the large supply of oil that is flooding the market due to:

• Strong U.S. production
• The end of Iranian sanctions
• The refusal of some members of the Organization of the Petroleum Exporting Countries (OPEC), like Saudi Arabia, to cut back production to support prices

One factor that could actually reverse the trend and raise the future price of gas is the oil tax recently proposed by President Barack Obama to support new investments in the nation’s transportation system.

The White House calls it “a new $10 per barrel fee on oil paid by oil companies,” but MarketWatch reports that the tax would likely not be paid by oil companies, who would instead pass it on to consumers. It could increase the price of refined fuels by 20 to 25 cents per gallon.

However, don’t expect to see such a tax anytime soon. Reports say the measure is not expected to get through Congress.

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