Gas prices in the Twin Cities area inched below $3 a gallon in some spots this week for the first time in more than a year.
On average, regional gas prices fell to $3.19 a gallon in the region, which is just 7 cents above the average reported one year ago and a far cry from the $4.76 average for June, according to the price tracking firm GasBuddy.com.
The cheapest gas was found in Hastings, where a price war among three gas stations had the price for unleaded gas prices sinking to $2.47 a gallon.
"They have been having a price war there for the longest time, between the Kwik Trip, Holiday and Speedway. It's just incredible," said Patrick De Haan, GasBuddy's head of petroleum analysis.
The Hastings gas prices have been warring since this summer, when they had "bargain" prices of $3.99. "During the summer, that seemed cheap," De Haan said.
But the low prices have spread.
The Holiday station on Margaret Street in North St. Paul sold gas Friday morning at $2.89 a gallon. The Holiday on E. South Avenue was $2.99 a gallon, as was the price at the Speedway on Summit Avenue in St. Paul Park. The Shell gas station on McKnight Road in St. Paul was down to $3.09 a gallon.
Alyssa Wiley, a North St. Paul mom, was thrilled at the prices and said it will "help a lot" with the family finances.
"That's a good price," she said looking up at the price on the large electronic billboard at the Holiday. "If you have more money that you are not using in gas, it is definitely helpful [and can instead pay for] groceries and credit cards. The other day I went to get eggs, and it was over $3. It used to be $1 something."
De Haan at GasBuddy is hearing that reaction a lot these days. "Americans are responding very warmly to the declines in [gas] price," he said.
On Friday, St. Paul resident Mark Broderick paid 15 cents less a gallon to fill up his Ford F-150 truck than he did the last time he stopped at the Marathon gas station near Lexington Avenue and County Road C in Roseville.
The price fell to $3.24 so he was able to fill his tank for $60 "instead of the usual $70," Broderick said.
"The prices have been dropping like 10 cents every two weeks is what I have noticed," said Broderick's friend and workout buddy Bob Lundgren.
Prices are dropping due to several reasons. De Haan noted the price of oil has plummeted to $71 a barrel, the lowest level in a year amid concerns about aggressive Federal Reserve interest rate hikes, a possible U.S. recession, plus COVID-19 and resulting lockdowns in China that have softened demand for oil.
Economic slowdowns in other parts of the world have also softened fuel demand at the same time that refineries worldwide have finished their maintenance and are increasing output.
"Inventories of gasoline and diesel have risen sharply," which helped moderate prices, De Haan explained. The markets have also been impacted by the fact that Russia defied the odds and continues to export crude oil. Those exports are now mainly by pipeline and not by ship. European sanctions and price caps on Russian oil remain "but that has not hampered the flow significantly," De Haan said.