Hop in the car; gas prices headed down, down, down

Thinking about an end-of-summer road trip?

It's not a bad time to go, considering gas prices in many parts of California have been dropping, according to the latest report from AAA. The state's average price per gallon is $3.78, the AAA monthly survey said, but people in many areas are paying less than that at the pump.

People in Modesto, for example, pay an average of $3.72 per gallon, AAA said. And, if you're an avid gas-price watcher, you'll know you can get cheaper gas at several stations around town.

Stations such as Circle 7 at North Santa Cruz and La Loma avenues. Gas cost $3.61 there Monday, a good deal considering the price at other stations approached $3.90 per gallon.

So, how's business at Circle 7?

"It's all right," manager Harjit Singh said. "But it's not like it used to be."

Singh referred to a time a few years back when gas ran about $3 per gallon. When prices approached $4 in early May, he and other gas stations saw consumers cutting back on road trips.

Things have improved this summer.

Economists say falling prices leave consumers with a feeling of money in their wallets, making them feel free to spend on travel, shopping and dining.

"When gas prices are low, we do better," Singh said, adding that sales of snacks and other items inside the gas station's store also increase.

The recent decrease in gas prices is happening for several reasons, AAA says. One is investor uncertainty about the strength of the oil market. Another is decreased consumer demand for fuel.

Still, for late-summer travelers, lower gas prices could make the difference between taking a trip or staying home. Economists say that while, for instance, a 25-cent-per-gallon drop only saves the typical driver $12.50 per month, it has a huge effect on the psychology of consumers.

Prices elsewhere in California range from $3.64 in Marysville to $4 in Yreka. Bridgeport, Conn., has the highest prices in the lower 48 states at $4.11.

Where's the cheapest gasoline in the country? Peoria, Ariz., where the average price is $3.26.

Bee staff writer Kerry McCray can be reached at kmccray@modbee.com or (209) 578-2358.