Gas prices in Maine have dropped under $2 per gallon for the first time in four years as more motorists heed stay-at-home directives.

The average price for a gallon of regular gas in Maine was $1.93 Monday, down 48 cents from a month earlier and 65 cents from the same day last year, according to price-tracking website gasbuddy.com. The lowest price reported in the state Monday was $1.20 per gallon for cash purchases at a Kenoco station in Union.

The reason is simple: Not many drivers are filling up.

“This is Economics 101, supply and demand,” said Allison Mac, a gasbuddy.com analyst. “Demand for gasoline has gone down 40 percent compared to last year on this day.”

The emphasis on staying at home to curb the coronavirus pandemic means most cars are remaining in park. Traffic volume on the Maine Turnpike over the weekend was less than half what it was in the last weekend of March 2019.

On Saturday, transactions fell 58.4 percent from the corresponding Saturday a year earlier, according to Maine Turnpike Authority spokeswoman Erin Courtney, although revenue dropped by a lesser percentage – 51.9 percent – because trucks are paying more of the tolls.

Since Friday, electronic signs on the turnpike have urged motorists to “Please Stay Home” and “Help Fight Covid-19.” Larger signs remind travelers that most beaches and coastal parks are closed.

The last time Maine gas prices dipped beneath $2 per gallon was in the first three months of 2016, after a price war among OPEC countries led to an oversupply, Mac said. In Maine, the average price bottomed out at $1.76 on Feb. 24, 2016.

“We could see the average price drop another 25 cents in the next two weeks,” Mac said. “It’s not like toilet paper, something we actually are consuming more of because we’re all at home, but gas, if you’re not driving, you’re not using it.”

The price for crude oil has fallen to about $20 per barrel, the lowest level since 2002. In February it was trading above $50 per barrel.

Denton Cinquegrana, chief oil analyst for Oil Price Information Service, said the industry is seeing a rush to fill any available storage space with crude.

He said historical price dips have coincided with either a drop in demand, such as during the financial crisis of 2008, or a surge in supply, such as with an OPEC price war. Over the past month, the coronavirus response collided with the failure of Russia and Saudi Arabia to reach an agreement on limiting production.

“I’ve never seen a demand shock and a supply shock at the same time,” he said. “How much lower can we go? Man, there’s going to be some regions of the country where federal and state taxes are going to be comparable (to), if not more than, the cost of the gasoline.”

Does Cinquegrana think gas could fall below a dollar a gallon in Maine?

“I certainly do,” he said.


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