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National Average Prices Drop One-Tenth of a Cent: Does it Matter?

American Automobile Association found the national average gas price dropped for the first time in 36 weeks.  However, it only dropped a remarkably modest tenth of a cent. Is this actually a significant move in prices? According to CNN:

“The national average price for regular unleaded gas dropped on Saturday by a 10th of a cent, snapping a streak of 36 consecutive daily increases…During that stretch, the average price increased 48.8 cents or 14.82%. The price fell to $3.78 Saturday.”

While it’s dubious whether such a small decrease could really be as drastic as “snapping” at 36 week streak, it is worth looking more closely at regional patterns. For example, a recent report from the AAA branch in the Mid-Atlantic seems to contradict the idea that national averages are on the decline:

“…the average price of a gallon of regular gasoline in New Jersey on Friday was $3.63, up 6 cents from last week. That’s also higher than the price from a year ago, when motorists were paying $3.54.”

Furthermore, the same report points out that the one-tenth decrease in price may not be significant in the context of larger trends – and for good reason:

“[The national average is] higher than the national average from a year ago, when motorists were paying $3.61. Analysts say the higher gas prices are mainly due to the trend of refineries across the U.S. performing seasonal maintenance and making the switch-over to summer blend gasoline production earlier than normal.”

It appears that in their haste to break news, this CNN blogger has overhyped a report that is – in fact – consistent with our expectations based on seasonal patterns. As with all things, it is absolutely necessary to base conclusions off of the best data available, and not to fit any sort of agenda.

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