Yesterday, I paid $2.13 for premium unleaded at a Chevron station in downtown San Francisco. This is in stark contrast to the $4.80 a gallon that I paid for a gallon of gas at that same gas station less than six months ago.
Even more amazing is the fact that gas prices are still trending down and according to experts may reach an average price of near $1 per gallon! How do the simple rules of supply and demand explain such a large change in price. I guess if people are unemployed they don’t really have to drive. No job, no gas. But, have enough jobs been lost to justify such a huge shift in demand. Probably not. So why the hell is the price of gas plummeting so rapidly?