Gas prices plunge, but worried consumers don't feel better off

It's almost like a surprise stimulus check: Gas prices have fallen so fast that the nation has found itself with an extra $125 billion to spend. But don't expect the freed-up cash to pump much life into the economy.

Filling up for less than $2.50 a gallon in some places hasn't done much to boost confidence - not when disappearing jobs, sagging home prices and the financial meltdown are everyday worries.

"Let's try six months. Let's try a year. Then we can talk about how much it's saving me," said Jacob Curtis of Columbus, Ohio, who paid $2.48 a gallon this week. "Right now, I'm just trying to make ends meet."

One in three Americans fears losing a job, half are worried about keeping up with mortgage and credit card payments, and seven in 10 are anxious about shrinking stock and retirement portfolios, according to a recent Associated Press-Yahoo News poll of likely voters.

With worries like that, saving $20 or $30 on a tank of gas doesn't amount to much of a silver lining.

Make no mistake: The drop in gas prices has been dramatic. A gallon of gas is 30 percent cheaper today than it was when prices peaked this summer. On July 11, a gallon of regular averaged $4.11 nationwide. On Wednesday, it was $2.86. That's almost as cheap as the $2.82 reading of a year ago.

The price of oil is in major free fall - down about 50 percent since July - but as is usually the case, Idaho's isolation from major metropolitan centers and gas refineries is delaying the benefits of the crash locally, said Dave Carlson of AAA Idaho.

Boise's gas supply comes from refineries in Wyoming via a pipeline from Salt Lake City.

Carlson said falling prices tend to encourage competition at the retail level, though he has seen price cutting in some places, including eastern Idaho. "The average price for a gallon of gas in Idaho was $3.18 today, but in Pocatello we saw a difference of 40 cents from high to low," he said Wednesday.

Idaho prices are about 10 days behind the national average, he said.

Carlson said gas futures for November delivery are at $1.67 for wholesale delivery before taxes. "I'm comfortable saying we could expect $2.50 a gallon for Thanksgiving," he said.

Charley Jones, president and chief executive officer of Stinker Stations, said demand in Idaho is down 10 percent - a situation he has never seen before.

"Supply exceeds demand and will for at least six months into future," he said.

Jones said he expects the price to drop below $3 by the end of October.

As lawmakers debate whether to send a second round of stimulus checks to Americans to lift the economy, the decline in gasoline prices could amount to as much as a $125 billion stimulus all by itself, according to calculations by Lawrence Goldstein, the director of the Energy Policy Research Foundation Inc.

That figure takes into account the amount of fuel used by drivers, households and businesses.

The difference is that the couple of hundred bucks that in previous years might have turned into a holiday splurge will probably be tucked away this time.