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Amid Coronavirus-Related Economic Turmoil, Gas Prices Hit A Low

RACHEL MARTIN, HOST:

Gas prices have hit a new low for the year. Drivers generally benefit from low gas prices, but now NPR's Camila Domonoske says it's a little more complicated.

CAMILA DOMONOSKE, BYLINE: Vickie Robinson (ph) just had to stop at this Gulf station in Woodlawn, Va. She couldn't say no to a price like this.

VICKIE ROBINSON: I was shocked this morning when I came out to see that the prices were at least 50 cents less than what I'm normally used to.

DOMONOSKE: How cheap was it?

ROBINSON: One dollar 81 cents - I can't believe it.

DOMONOSKE: She was thrilled to fill up at that price, and AAA spokeswoman Jeanette Casselano says gas prices are still falling.

JEANETTE CASSELANO: Right now, signs are indicating that should trends continue the way they are, there's a possibility we could see the national average hit $2 in the next coming weeks.

DOMONOSKE: That's even more dramatic than it sounds because, this time of year, gas prices are usually going up, but everything is topsy turvy because oil prices have crashed recently. It's a combination of the ongoing pandemic as people around the world stay home to avoid spreading the coronavirus and an oil price war between Saudi Arabia and Russia. Back at the gas station, Mani Younas (ph) feels a little like he's stepped in a time machine.

MANI YOUNAS: I feel like I'm going back to, like, 1998 when it was 75 cents maybe.

DOMONOSKE: Younas is actually concerned by just how low these gas prices are. Some people dislike low gas prices because they encourage gas guzzling that adds to climate change, but Younas is worried about what it means for the U.S. economy. He's been watching the stock market crash.

YOUNAS: It can be a 50 cent gas, but if you don't have money to fill up the gas, what's the point of having a cheap gas?

DOMONOSKE: He's not the only one asking whether these low prices are a bad sign for the U.S. That price feud between Russia and Saudi Arabia, it's hurting oil producers around the globe, including American producers. Remember, the U.S. is now the world's largest oil and gas producer. So while low prices save American drivers money, they cost American producers way more. Tom Kloza is an analyst with the Oil Price Information Service.

TOM KLOZA: I worked out some back-of-the-envelope math, and I figure that maybe in March and April of this year we'll save about $10 billion compared to maybe what we paid in 2018.

DOMONOSKE: But if you add up the money lost by the American oil and gas industry and every company affected by that industry in just one week of crashing oil prices...

KLOZA: It is many, many times $10 billion.

DOMONOSKE: And these low prices are a symptom of all the things that have slowed down or stopped because of this pandemic as schools, factories, conferences have shut down. That pushes gas prices down, but it's also bad news for all kinds of businesses and their employees, like Wilson Garcia (ph). He's very happy with how cheap gas has gotten.

WILSON GARCIA: Seeing it, like, under $2 is amazing. I haven't seen it that low in a long time. It's really great for my pocket at least.

DOMONOSKE: But he works at a hotel, and the travel and hospitality industry has been hit hard by the pandemic.

GARCIA: So a lot of people are canceling trips aka not staying in hotels. So they've had to reduce hours since we're not making the revenue we thought we were going to make.

DOMONOSKE: Garcia was supposed to be working today, but he's not. He was cut from 40 hours this week to 24. So getting to fill up his tank for cheap, he calls it bittersweet. Camila Domonoske, NPR News. Transcript provided by NPR, Copyright NPR.