Home Front

A blog about the economy and the Sacramento-area real estate market.

December 4, 2008
Back to the fuel pump

   It's almost unworldly how cheap gasoline has become, compared to recent history.

       The statewide average is down to $1.90 a gallon, a drop of 87 cents in a month. It's less than half what it was in mid-June, when it hit a record $4.61.

    Hey, it's so cheap, the next thing you know, when you pull up to the pump, a group of attendants will greet you, wash your windshield and check your oil, like in "Back to the Future." Or maybe they'll give you free drinking glasses as premiums (Kids, ask your parents to explain that reference).

    Or maybe not. Anyway, in Sacramento, the price is a mere $1.81, the cheapest it's been since October 2003. It's dropped from a record $4.57 in mid-June.

     The latest numbers are in AAA's daily fuel gauge report. 

   The bad news, of course, is that the price drop is being caused by this recession you may have heard about. A weak economy kills the demand for energy, which kills the price. But I guess that's better than the 1970s, when we had the worst of all worlds: high fuel prices and a recession.

   Prices figure to keep falling. The price of oil has dropped below $46 a barrel, thanks to another round of crummy economic news.

    Speaking of crummy news...Mark Zandi of Moody's Economy.com and one of our favorite economists, just told a U.S. Senate hearing that the Big Three automakers really need $125 billion in government aid to avoid bankruptcy.

    Good luck with that.

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