More Relief at the Pump as State, U.S. Prices Fall

Offering a hint of relief for drivers who feared record pump prices would last through the summer, California’s average gasoline price fell to $2.289 a gallon and the nationwide average fell below $2, a government survey found Monday.

In California, the average cost of self-serve regular gasoline dropped by 2.7 cents over the last seven days, representing the second straight week of declines, according to a weekly sampling by the Energy Information Administration, an arm of the Energy Department. Monday’s statewide price is down from the May 31 high of $2.327 a gallon, but it remains more than 50 cents above the average a year ago.

Retail diesel prices in California, which for a period this year were higher than the cost of gasoline, fell 7 cents a gallon to a statewide average of $2.051 a gallon Monday, the EIA said. The cost of diesel has been heading lower since May 10, when the statewide average hit a record $2.356 a gallon, prompting work stoppages by independent truckers whose pay didn’t adjust with the soaring cost of fuel.

Nationwide, the average price for self-serve regular gasoline fell 4.9 cents to $1.985 a gallon Monday, the first time the figure has dropped below $2 a gallon in four weeks, the EIA said. California’s average has been above $2 a gallon for 17 straight weeks.

The downward trend is being attributed to lower crude oil costs and other factors, but California’s retail prices remain out of sync with the wholesale cost of gasoline, which has been falling more quickly.

On Monday, regular fuel traded on the Los Angeles spot market at $1.38 a gallon, which should translate into pump prices of about $1.98 a gallon once taxes and other costs are added in.

On Monday, two U.S. congressmen proposed legislation that would prevent the introduction of any new specialty fuel blends and encourage consolidation of the existing “boutique” blends -- such as those used in California -- to simplify production and make it easier for states to share gasoline supplies in a crunch.

The Gas Price Reduction Act, introduced by Rep. Roy Blount (R-Mo.) and Rep. Paul Ryan (R-Wis.), would inject “some logic at the gas pump,” Blount said.

“If we create a larger market for a greater amount of gasoline, we’ll help drive prices down,” he said.