Michigan gas price falls to 47 cents.

Gas Price In Michigan Plummets To 47 Cents, First State To Offer Gas For Less Than $1

The gas price in Michigan fell to a level not seen in years, leading many drivers to think it was a mistake. At one particular station in Houghton, Michigan, motorists were paying 47 cents a gallon over the weekend.

In a report by USA Today, other nearby Michigan gas station prices were ranging between 77 and 95 cents per gallon. The line of cars was backed up so far along U.S. Highway 127, law enforcement had to be called in to control traffic.

GasBuddy, which tracks retail fuel prices at almost 130,000 gas stations in the U.S. and Canada, believes the drop was the result of a price war between the businesses. Patrick DeHaan, a senior petroleum analyst with the firm, said the Michigan stations are the first ones in the U.S. selling gas for less than $1 per gallon.

AAA Michigan reports the price for self-serve regular unleaded gas has dropped 13 cents statewide in the past week. In much of Detroit, drivers are paying about $1.73 a gallon.

In an 18-month nationwide survey, GasBuddy indicated a national average price drop from $3.58 a gallon to $1.89. As previously reported by the Inquisitr, U.S. gas prices continue to mirror the steady decline of the international price of crude oil.

Experts believe the price of oil is declining as the supply increases and demand for gas has fallen in recent months. Overnight, the price of oil fell to $27.70 per barrel, its lowest level since 2003.

Much of the plunge was due to the United States and European Union removing economic sanctions that had cut oil exports from Iran.

With the sanctions revoked, oil ministers in Iran intend to boost oil production and ship 500,000 barrels a day, according to the Islamic New Agency. They project production to eventually increase to two million a day.

Some industry forecasters believe the boost in production may cause the price per barrel to fall as low as $10. Should this happen, the average price of gas in the U.S. could drop below $1 per gallon.

“The continued and unprecedented plunge in the price of crude oil has continued, allowing gasoline prices in virtually the entire U.S. to continue plummeting,” said DeHaan. “The downward trend taking place across the country will continue.”

According to the GasBuddy survey, other states besides Michigan are seeing lower gas prices. In Alabama and Arkansas, the average price of gas sits at $1.65, while drivers in Oklahoma are paying $1.56. In Mississippi, some are finding prices as low as $1.51.

Yet, not all U.S. states are sharing in lower gas prices. Hawaii motorists are having to shell out $2.63 a gallon, and many stations in California are selling gas for $2.76.

State and local fuel taxes may be one factor why some areas have higher prices than others. The survey indicated the average price of gas in New York at $2.09. Right next door in New Jersey, where local gas taxes are lower, residents are paying $1.75.

Another influence on gas prices is the proximity of oil refineries. As many processing plants are located in states along the Gulf of Mexico, where the oil supply is abundant, residents generally pay less for gas as well. South Carolina, which also has several large refineries, tends to have a lower average price than the rest of the nation.

The gas price in Michigan returned to a more normal $1.47 by Monday morning. While the current national average stands at $1.89 per gallon, $1.72 is the average price for the state.

[Photo by Miguel Villagran/Getty Images]

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