Gas prices expected to drop 50 cents by summer

After rocketing up 91 cents since January, including 44 straight days of increases, the national average this past week stopped just shy of US$4 a gallon and has retreated to under US$3.98. A steady decline is expected to follow.

It might not be enough to evoke cheers from people who recall gas stations charging less than US$3 a gallon last year. But it would still ease the burden on drivers. And it might help lift consumer spending, which powers about 70 percent of the economy. A 50-cent drop in prices would save U.S. drivers about US$189 million a day.

Typically, gas prices peak each spring, then fall into a summertime swoon that can last several weeks. This year's decline should be gradual but steady, said Fred Rozell, the retail pricing director at the Oil Price Information Service.

Some drivers might not notice much of a price drop at first, Rozell cautioned. When average gas prices fluctuate nationally, some areas are affected more than others. In cities with many service stations, for instance, prices can be slower to fall. It's even possible prices will rise at some stations in coming days even if they decline nationally.

And after the galloping surge in prices this year, many gas station owners are reluctant to lower prices until they see their competition doing the same, Rozell said.

"It's just the nature of the business," he said. "They're going to try to get the most they can."

Station owners still feel bruised from their own higher costs earlier this year. In some cases, their suppliers raised prices so quickly that station owners couldn't pass along those higher costs to consumers fast enough. Competition also makes it hard for some stations to raise prices.

"So station owners will be watching each other this summer," Rozell said. "When one guy drops, so will the other."

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