Falling Gas Prices Not Likely To Fuel Holiday Shopping

Charles Moriarty's pickup hasn't seen a full tank of gas since he bought it in March.

"It's been so expensive that I haven't been able to fill it," Moriarty said Monday as he pumped gas into his Dodge Ram pickup.

However, with gas prices continuing to tumble, it may not be long before he and other Bay area motorists can again afford to fill their gas tanks. But don't expect consumers to feel better about holiday spending. They are too worried about the economic crisis sweeping Wall Street and the overall gloomy picture of the economy to see gas prices as much of a relief.

Gasoline prices in the Tampa Bay area have plunged an average of 28 cents a gallon in one week. Local retailers were charging $3.26 on average for a gallon of regular unleaded Monday, down from $3.54 a week ago, according to AAA's Daily Fuel Gauge Report.

"It's a nice surprise," Moriarty said. "It's a little bonus."

Moriarty is among those who don't expect to spend more on holiday shopping this year because gas prices have fallen. Worries over the economic crisis will limit his spending.

"I don't think it's going to make that much of a difference with the way things have been going," he said.

Brad Kamp, a professor of economics at the University of South Florida, said holiday spending plans made in August will probably be expanded to reflect the lower cost of fuel. "If they're paying $1 less a gallon, sure, they'll spend a little more," Kamp said.

Kamp noted, however, that pump prices are still well above year-ago levels. Local pump prices were averaging $2.75 a gallon a year ago, 51 cents below the existing average, according to AAA.

Based on the year-to-year comparison and the uncertainty surrounding the U.S. economy, consumers will probably spend a little less on holiday shopping this year, Kamp said.

Citing increased fuel supplies and a sharp decline in oil prices, industry observers say local pump prices may drop to $3 a gallon at most locations by the end of this month. "We'll probably get down to the $2.70, $2.80 range, I think," Kamp said.

Oil prices have dropped to about $77 a barrel, down from a high of $145.29 on July 3.

AAA spokesman Randy Bly and others say pump prices will continue to fall for several reasons, including the ailing economy, which is forcing consumers to drive less.

"Motorists can expect retail gasoline prices to continue to drop at a rapid rate this week," Bly said.