Low oil prices lead to plunging prices at the pump

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INDIANAPOLIS, Ind., (January, 21, 2016) - Prices at the pump continue to fall here in central Indiana.

As of Thursday evening, many service stations in the metro area are selling gas for around the $1.28 mark. The average price for a gallon of regular gas in the metro area is a bit higher at $1.52. That’s still down 22 cents from just last week and down 42 cents from a year ago at this time.

Add in gas discounts from retailers on top of the low prices and drivers could even pay under a dollar for a gallon of gas. The reason behind the low prices at the pump is the falling price of a barrel of oil. Prices have been on a steady decline since June of 2014.

“The problem is that these very low oil prices are causing changes in the oil industry, layoffs, cut backs and in the years ahead those layoffs and cut backs will ultimately lead to less oil being produced which will inherently lead to higher oil prices,” said Patrick DeHaan, a petroleum analyst for gasbuddy.com.

A recently released survey said the average American household saved about $700 last year because of lower gas prices. Prices are expected to climb back up at the beginning of March and flatten out around May.

The $1.59 Indiana average for a gallon of gas is lower than neighboring states. Right now, Illinois is seeing $1.80 a gallon. For a list of the lowest prices in central Indiana click here.

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