Real Price of Gas Continues to Drop=$300B Savings

The cheapest gas in the country can be found in Kansas City for as low as $1.39 per gallon, and the average retail price for gas is now down to $1.98 per gallon. Without the high-priced states of Alaska ($2.95) and Hawaii ($2.89), the national average for the other 48 states is down to $1.94 per gallon.

Using real gas prices from the EIA (in November 2008 dollars), the chart above (click to enlarge) shows how today's gas prices compare to past prices.

The last time real gas prices (national average) were as low as $1.98 per gallon was almost five years ago in February of 2004, and the last time real gas prices (national average) were as low as $1.39 per gallon (current Kansas City low price) was almost seven years ago in February of 2002 (see chart above). Gas prices in Kansas City are within 18 cents per gallon of the lowest-ever real gas price of $1.21 per gallon in February of 1999.

The drop in gas prices from $4.12 in July to the current $2.07 per gallon will generate annual savings of more than $300 billion for American consumers and businesses (each $1 fall in gas prices = $142 approximately billion annual savings). Talk about a mustard seed!