Average gasoline price nationwide drops below $3

With the end of the U.S. holiday shopping season approaching, the national average retail price for gasoline fell just below $3 a gallon for the first time in seven weeks, the government said Monday. California’s average also continued to slide but remained well above the national average.

The national price for regular gasoline declined 0.2 of a cent over the last week to $2.998 a gallon, the Energy Information Administration said in its weekly survey of service stations.

The price was up 68 cents from a year earlier, the agency said.

In California, the average pump price fell 4.4 cents to $3.285 a gallon -- up 72 cents from this time last year.

Many parts of the country have seen pump prices below $3 a gallon for about two weeks. The move of the national average below the $3 level came as retailers worried that falling housing prices and high energy costs would cut holiday spending. Many hope lower gasoline prices could give consumers a psychological lift.

Savings at the pump reflect the decline in crude oil prices, which account for about half the cost of making motor fuels.

The price of U.S. oil fell 40 cents to $91.29 a barrel on Monday at the New York Mercantile Exchange after hitting an all-time intraday trading high of $99.29 almost a month ago.

Slower gasoline demand growth, because of expensive motor fuel, is also helping to keep pump prices in check.

In the government’s latest weekly price survey, prices fell everywhere except the Midwest, where the average increased 4.8 cents to $2.943 a gallon. Gasoline cost the most on the West Coast, falling 3.9 cents to $3.205 a gallon. Among major cities, San Francisco had the highest gasoline costs at $3.389, down 4.7 cents.

The Gulf Coast states had the lowest price by region at $2.85 a gallon, down 2.6 cents.

Houston had the cheapest pump price at $2.792 a gallon, down 3 cents.

Separately, the price truckers paid for diesel fuel fell 1.6 cents in the last week to $3.309 a gallon, up 70 cents from a year ago. In California, diesel slipped 2.9 cents to an average of $3.426 a gallon

The New England states had the most expensive diesel fuel at $3.581 a gallon, up 1.1 cents. The Gulf Coast states had the most affordable diesel at $3.245, down 2 cents.