Gas Prices Continue to Drop

NEW YORK - Regular unleaded gasoline prices fell nearly two cents Monday, dipping below the $2.50 mark, according to travel group AAA's daily survey.

The nationwide average price for regular unleaded fell to $2.492 a gallon from $2.509 Sunday, according to AAA. The price is down over 18 percent from the record high of $3.057 that it hit on Labor Day, following Hurricane Katrina.

Gasoline is down from $2.887 a month ago, but up from $2.031 a year ago, AAA says, a 23-percent year-over-year increase.

Retail diesel, which had not experienced the same declines as gasoline recently, fell 1.9 cents to $3.091 a gallon from $3.11 Sunday. Diesel prices are down 4.5 percent from the record $3.239 set last Monday, but up almost 38 percent from $2.247 a year ago.

Gasoline prices have steadily fallen during the past two weeks on signs that the soaring expense of energy is finally starting to curb consumption within the U.S., the world's biggest user of fuel. In its weekly inventory report, the U.S. government reported Wednesday that demand for gasoline was 2 percent lower last week despite the recent decline in pump prices.

Even though consumer may be putting the brakes on consumption, many analysts expect prices to rebound as winter approaches.

On a state-by-state basis, AAA says Hawaiians pay the most for regular unleaded at $3.007 a gallon. Oklahoma has the lowest prices, at $2.142 a gallon.

The average gallon of mid-grade gasoline fell 1.9 cents Monday to $2.645, according to AAA. Premium unleaded fell 2.1 cents to $2.741 a gallon.

Source: CNN/Money