As 2015 comes to an end, Americans are living large on low gas prices.
U.S. average pump prices for regular-grade gasoline closed the last week of the year at just $2.03—up a fraction of a penny versus the previous week, yet at nearly a ten-year low.
For all fuel grades, according to the U.S. Energy Information Administration (EIA), pump prices finished the year 26.5 cents lower than year-ago levels. And highway diesel fuel closed the year down nearly 98 cents compared to year-ago levels.
According to the EIA, about 46 percent of the cost of pump gasoline is due to the cost of crude oil, while 14 percent is due to the refinery stage and 19 percent goes to distribution and marketing. More than one fifth (21 cents of every dollar of gasoline) goes to taxes.
The last time gas prices were lower than this was in December 2008 and January 2009, when oversupply and a deepening recession introduced sudden, strong downward price pressure.
The very low prices have helped spur a renewed interest this year in some larger pickup and SUV models—as well as some record levels of car-based holiday travel.
Fiat Chrysler Automobiles (FCA) had recently been singled out by the Union of Concerned Scientists for buying so many emissions credits from other automakers in order to sell more trucks and be in compliance with regulations.
Adjusting for inflation, the situation looks even better: Gas prices this fall and into the winter have been at their lowest since 2004. This time it’s been due largely to the glut of crude oil globally, caused initially by American shale producers and then perpetuated by record production from the Middle East—Saudi Arabia in particular. Factor in a weak economy in Europe and Latin America, and slowing growth in China, and it’s a case of oversupply.