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Big drop in gas prices for summer

Declining gas prices may be a sign of a slowing global economy

Despite the slowing job markets and sad quarterly sales reports, could there really be a silver lining in declining gas prices?

Gas prices have dropped 6 percent. The national average for gas dropped to $3.45 per gallon. In the Midwest, some areas have dropped their prices to $2.99. This year’s summer prices are 15 cents less than last year and 45 cents cheaper than a few months ago. The dip in gas prices is the first time since February when gas prices were hitting almost $5 per gallon.

Economist at Deutsche Bank, Brett Ryan, puts the decrease in gas prices as a form of economic stimulation, “Just as an increase in gas prices is essentially is a tax on customers, a decrease in prices acts as a tax cut.

The dip in gas prices is creating a hopeful outlook to the recent sales reports—the decrease in price can hopefully translate into a better summer sales report.

Some experts fear that the dip in oil prices may be a sign of a slowing global economy. Author Dan Dicker of Oil’s Endless Bid: Taming the Unreliable Price of Oil to Secure our Economy said, “There’s an enormous amount of production out there…But the demand looks weak” due to consumers driving fuel efficient cars.

Another writer, Jim Motavalli, makes a claim that the influx in gas prices can be troubling for consumers because they wouldn’t know what automobile would suit them financially—would it be worth paying premium for a fuel efficient vehicle?

Motavalli writes, “I can say that a price floor for gasoline would be a great idea that would give automakers some stable ground as they plan the future. It’s an incentive not just for electric cars but for the smaller vehicles that really should be dominating our roads.”

According to CNNMoney, declining gas prices has followed in the same suit as declining oil prices. Oil trading was at $78.72 per barrel Friday—down 20 percent year-to-date.

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