Gas prices fell by about 35 cents a gallon in Metro Detroit and across the state in the past week, dropping to prices Michigan motorists haven't seen at the pump in nearly two years, AAA Michigan said Monday.
In Metro Detroit, the average price for a gallon of unleaded gas on Monday was $2.21, down 35 cents from a week ago and 92 cents from a year ago. Across the state, the average price of a gallon of gas was $2.26, down 34 cents from a week ago and a $1.27 from a year ago. Prices have not been that low since Jan. 25, 2007, according to AAA.
"We haven't seen such a big drop at one time since we started keeping record" in the mid-1970s, said Nancy Cain, a spokeswoman for AAA Michigan.
In Metro Detroit, at least four stations were selling gas for a few cents less than $2 a gallon Monday, while several others posted prices a few cents above that.
"I'm very excited that gas (prices) are back down," said Charlotte McGuire of Warren, while waiting to fill up her 2004 Saturn Ion at the Get & Go station at 13 Mile and Utica in Roseville. It was the first time she had filled up the tank in several months. "With Christmas coming up, we can put some money away for gifts."
More relief at the pump could come if the price of crude oil continues to head south, said Phil Flynn, vice president and senior market analyst for Alaron Trading Corp., a futures brokerage firm.
"This is something we predicted would happen even during gas-mania," he said, referring to the skyrocketing gas prices over the summer.
The cost of crude oil skyrocketed to a high of $147 a barrel in July because investors considered it a safe haven in a credit crisis believed only to be affecting the United States, Flynn said. But when the crisis impacted other parts of the world and demand fell around the globe, prices also plummeted. On Monday, crude oil fell below $65 a barrel.
"It's created a situation where gas prices have dropped dramatically," Flynn said.
Meanwhile, U.S. demand for gas is down 2 million barrels a day from a year ago, he said.
And even though gas prices are lower, motorists won't necessarily be using more fuel because of the financial stresses in the economy.
"People are worried about their jobs and paying their mortgages," he said. "They're not going to waste gas like they used to."
With falling gas prices, business is up at Laith Hanna's six service stations in Metro Detroit, where gas was selling for $2.15 a gallon on Monday, down from $2.49 a couple of weeks ago.
"Volume is up a little bit, but that doesn't mean anything," said Hanna, who has noticed most drivers still are trying to conserve gas. "You've got to remember: People still don't have money."
At the Get & Go gas station in Roseville, where McGuire was filling up, the pumps have been running constantly since Saturday when a neon sign began advertising gas at $1.99 a gallon. Ten to 15 cars lined the pumps Monday afternoon, waiting to fill up.
"It's been nonstop from the time we open until we close," said employee Rashad Mihyoub.
Earl Hudick, 21, didn't mind the wait. "I wish it was like this forever," said Hudick, who has been driving 55 miles each way from his home in Newport to a Fraser ice arena every day to play hockey with his semi-pro teammates, the Detroit Dragons. "I'm coming back here tomorrow."
