The average U.S. price for a gallon of regular gasoline took its biggest drop since 2008 in the past two weeks, due to lower crude oil prices, a big price drop in pump prices in California and Hurricane Sandy, according to a widely followed survey released on Sunday.
Gasoline prices averaged $3.5454 per gallon on November 2, down 20.75 cents from October 19 when drivers were paying $3.7529 at the pump, Lundberg said.
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The decline was the biggest two-week price drop since the survey recorded a 21.9 cents price decline December 5, 2008 due to a crash in petroleum demand during the global recession.
Even though many people had to line up for gasoline for hours after Sandy devastated much of the Northeast coast, the storm played a part in the price decline as many would-be consumers were not able to travel as a result, according Trilby Lundberg, editor of the Lundberg Survey.
Lundberg also cited the seasonal dip in demand that typically comes after August.
While demand appeared to be very high for gasoline in New York and New Jersey after the storm, Lundberg said that purchases were down because many people could not get to fuel.
However, supply shortages were not causing an increase in the average price of gasoline, according Lundberg.
"There is a fear among retailers that they will be accused and prosecuted for price gouging if they raise prices enough to prevent running out," she said, adding that the problems would be unlikely to end soon.
"It's going to be a long and hard recovery for infrastructure and fuel supply but also for fuel demand," Lundberg said.
Another reason for the total U.S. price decline in the latest survey is California, the biggest state consumer, where pump prices fell 49 cents in past two weeks after an extreme price increase a month ago because of refinery problems.
The November 2 survey shows that gas prices have fallen a total of 29.21 cents in the last month, Lundberg said.
The highest prices for regular gasoline recorded in the November 2 survey were in San Francisco at $4.05 a gallon, while drivers in Memphis, Tennessee were paying the least at $3.11 per gallon.
(Reporting By Sinead Carew; Editing by Marguerita Choy)