The holiday season is giving Long Islanders a present: Gasoline prices have fallen to levels last seen in March.
The average price for a gallon of regular unleaded gas on Tuesday on Long Island was $2.71, the lowest since March 22, said Denton Cinquegrana, chief oil analyst in the Wall, New Jersey, office of the Oil Price Information Service, a fuel information provider headquartered in Gaithersburg, Maryland.
An abundant supply of crude oil is behind the decline, experts said.
At a Cumberland Farms gas station in Plainview on Tuesday, the price of a gallon of regular gas was $2.64. The price was $2.71 at a BP in Freeport and $2.61 at a Speedway in Holbrook.
Nationally, the decline in gas prices has been steeper, as the average price at pumps across the country Tuesday was $2.45, the lowest since Dec. 26 and 3 cents less than a year ago. Long Island prices, while down from March, are up 6 cents from a year ago.
American consumers are spending $200 million less per day on gasoline than they were 60 days ago, said Patrick DeHaan, head of petroleum analysis at GasBuddy, a Boston-based company that provides fuel price data.
In turn, holiday retail spending will be impacted, experts said.
“It won’t affect the total amount that people spend, but it will affect the composition of the spending. When gas prices decline, that frees up more of their dollars to be spent on other goods and services, so in that sense it acts like a tax cut,” said Chris Lafakis, energy economist at Moody’s Analytics, based in West Chester, Pennsylvania.
Between 80 percent and 85 percent of holiday travelers journey by car, and gas prices won't shift the numbers, said Robert Sinclair Jr., spokesman for AAA Northeast in Garden City.
“If the [strong] economic factors are in place, gasoline prices don’t make much of a difference. It is usually only 10 or 15 percent of the budget” for a trip, he said.
Farmingville resident Bill Aguiao, 53, paid $53.29 to put mid-grade gas in his Chevy Silverado pickup truck at the Cumberland Farms in Plainview on Tuesday. A fill-up now would be about $70, he said.
Changing gas prices don’t affect his decision to travel, he said.
“It’s not that much of a difference if it’s $10 to $15 higher,” said Aguiao, an X-ray technician who also said he is careful with his spending in other ways.
Melville resident Mark Smith, 61, who works in insurance and financial services, took notice of the falling prices at the pump while filling up his Mercedes S550 at Cumberland Farms.
“I care because when you own more than one car, it adds up,” said Smith, who owns three vehicles.
The United States, Russia and Saudi Arabia have been producing crude oil at record levels.
“As a result, oil inventories have increased, not just in the U.S., but globally. According to . . . Energy Information Administration data, U.S. crude oil storage levels have increased in each of the past 10 weeks and have swung from a deficit to a surplus versus the five-year average,” Cinquegrana said.
Also, in November, the United States granted six-month waivers to eight countries, including China, India and Turkey, to continue importing Iranian crude oil without running afoul of U.S. sanctions; those waivers contributed to falling crude prices, he said.
On Tuesday the price of benchmark crude settled at $53.25 a barrel, a nearly 30 percent decline from the price on Oct. 3.
However, a reversal in pricing direction could be on the horizon.
At its meeting in Austria on Thursday, OPEC is expected to cut crude oil production by 1.3 million barrels a day, Cinquegrana said. If the Organization of Petroleum Exporting Countries cuts production by more than that, crude prices per barrel could increase by $5 to $7 relatively quickly, he said.