Drivers filling up at gas stations across Baldwin County in January 2015 found themselves paying roughly half what they had a year earlier, a stretch of falling prices that left many with unexpected extra cash for everything from groceries to nights out.
At a Malbis Shell station along Alabama 181 in Daphne, one Loxley motorist described watching his fuel savings translate directly into a bigger household budget for entertainment, joking that the money he wasn’t spending on gas was going straight into extra spending money. He wasn’t alone. Across the region, retailers and economists alike pointed to falling pump prices as an unexpected boost to household budgets heading into the new year.
The average price for a gallon of regular gasoline in Alabama stood at $1.92 that Monday, below the national average of $2.05, marking the 121st consecutive day of falling prices statewide, a new record for Alabama. Prices at that level hadn’t been seen since 2009, when Alabama gas averaged $1.78 a gallon, or roughly $1.96 in inflation-adjusted 2014 dollars. The last time prices were this low before that stretch was 2005.
University of Alabama economist Ahmad Ijaz said the drop in fuel costs was providing a modest but real lift to the broader economy, estimating the decline could add somewhere between four- and five-tenths of a percentage point to gross domestic product nationally. He said the extra disposable income created by cheaper gas was likely to show up in increased consumer spending in the months ahead.
AAA-Alabama spokesman Clay Ingram said at the time that prices were likely to keep falling through the end of January and into February, predicting the decline could continue at roughly a penny a day and shave another 10 to 15 cents off the price of a gallon before leveling out. February, he noted, tends to be a more stable month for fuel pricing.
The price collapse traced back to a global slide in crude oil prices, which had fallen by nearly half since the previous summer as worldwide output increased even as demand growth slowed. Crude was trading around $47.90 a barrel at the time, a stark contrast to prices well above $100 a barrel just months earlier.
For Baldwin County households and small businesses that depend heavily on vehicle travel, the sustained price drop offered welcome breathing room heading into 2015, even as economists cautioned that the same falling prices carried mixed implications for energy-sector jobs and investment elsewhere in the broader economy.