Gas Prices Fall Across the Country, But Will the Lower Prices Last?

Now that refineries have the kinks worked out from the seasonal blend switch-over, prices at the pump are falling

Rudy Rocha delivers gas to a Costco gas station in Tustin, Calif., Friday, Oct. 5, 2012.
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Pretty much a godsend ahead of one of the most travel-heavy holidays, gas prices across the country are dropping, in some parts as much as 50 cents a gallon, providing consumers at least some relief from what has been a painful few months at the pump.

Gasoline prices currently average about $3.60 per gallon, according to AAA's Daily Fuel Gauge. That's five cents down from yesterday and more than 20 cents from last month. Almost a quarter of gas stations surveyed by GasBuddy.com reported lower gasoline prices than a year ago and 6 percent reported selling gas for less than $3.25 per gallon.

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The recent decline in fuel prices is due to the annual switch-over from the summer blend to the winter blend. Federal law requires refineries to start producing winter blend fuels by October 1, and the efforts leading up to the change often gum up refinery workflow, creating supply disruptions and price increases.

"What we're seeing is pretty consistent with the seasonal patterns," says Gregg Laskoski, senior petroleum analyst at GasBuddy.com, of recent price declines.

But while the end of the seasonal switchover and lower crude oil prices suggest gasoline prices could remain muted for a while, refinery capacity declines, especially on the East Coast, pose a concern, Laskoski says. After operating at almost 90 percent , that figure has dropped to just under 82 percent for East Coast refineries.

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"Refinery capacity is a basic indicator of supply," Laskoski says, adding that the reason for the pared back capacity remains unclear. "[The numbers from the East Coast] suggest that gas prices are not going to decline as significantly there."

But while 96 percent of gas stations across the country reported lower prices than a week ago, some regions are lagging when it comes to feeling less pain at the pump--Montana, Idaho, and Wyoming residents are still seeing figures as high $3.78 per gallon on average when they fill up. The good news is relief is on the way, experts say. These states usually lag national averages, but price declines might be in store soon.

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Meg Handley is a reporter for U.S. News & World Report. You can reach her at mhandley@usnews.com and follow her on Twitter at @mmhandley.