Gas Prices In Free Fall!

Due to declining crude prices and changing consumer habits (read: "buying less gas"), AAA reported that gas prices in California fell $.20 last month, to an average price of $3.12 per gallon.

But before you get too excited, the San Fracnisco Chronicle notes:

"Gasoline prices tend to climb in the spring, as more Americans take to the road for weekend trips. Also, the amount of gasoline in storage probably will fall as refineries rev down for annual maintenance work, a process already starting in California.

Refineries also are throttling back gasoline production in an effort to increase prices. Last fall's soaring crude oil costs slashed the refineries' profit margins; Chevron Corp. lost $55 million on its U.S. refineries in the fourth quarter of 2007. "

To put a number on this grim picture, the Energy Information Administration is projecting $3.55 per gallon in the second quarter.

State's gas prices drop 20 cents in month [San Francisco Chronicle]