Gas Prices Plummet, Hybrids And EVs Feeling The Pinch

Filling up at the pump is no longer the eye-watering affair it once was. Remember $4 dollars a gallon? How could we forget, right? And yet here we are, noting that gasoline prices have just plummeted another five percent, now averaging $2.14 a gallon—70 cents lower than this time a year ago. According to experts, we’ve not yet reached the bottom.

How low prices will go remains to be seen, but GasBuddy suggests we may see a national average around $1.99 by Thanksgiving day, some 80 cents below last year and the lowest prices seen since March 2009; this recent drop, according to Reuters citing a Lundberg survey, is due to “abundant supplies and higher run-rates at U.S. refineries at the end of the seasonal maintenance period.” Reuters says that refiners are selling at lower profit margins.

Many states will currently be seeing prices at the pump well below $2 a gallon; of the cities in the lower 48 states, Indianapolis is currently recording the lowest average prices at $1.79 with Los Angeles topping the list at $2.76 a gallon. Indeed, prices today are the lowest they’ve been since Jan. 23, when the national average was $2.07 gallon, due to a strong U.S dollar and high supply.

Consumers are now so accustomed to lower gas prices that for the first time ever, the sedan segment now trails smaller SUVs in terms of sales, and many plug-in hybrids and electric vehicles have undertaken hefty price cuts to keep sales moving.

“Certainly on some products like hybrids and electric vehicles, lower gas prices make it more difficult,“ Raj Nair, Ford’s global product development chief, told Automotive News earlier this year. "Although we haven’t seen a big near-term impact … we have seen a longer term impact on total electrification sales for the industry. They are not as high as some people expected.”