Why are gas prices so low across the nation?

A look at why gas prices are so low across the nation

COLUMBUS, GA (WTVM) - Gas prices are steadily dropping across the nation, and AAA reports Georgia drivers are seeing the lowest prices at the pump since May 2009.

But do you know why?

Dr. Linda Hadley, Dean of Business at Columbus State University, says it's all about economics.

Because of the global economic recession, said Hadley, demand for oil has fallen.

At the same time, the US is now producing more oil, so that means there is an increase in supply and a decrease in demand. 

"US production has surged, it's a process called fracking, where they're taking oil from shale," Hadley said. "And as a result, there's a more supply, so anytime you have an increase in supply and a decrease in demand you'll see prices go down."

Fracking or hydrolic fracturing is where oil and gas drillers inject fluid under high pressure into shale rock. Shale rock holds oil in gas in its tiny pores.

Hadley says this is a global issue. Countries that import oil like the US benefit from the low prices, but countries that export oil are now suffering. On the negative side, Hadley says the long-term problem of low gas prices will impact the producers.

"The problem with the falling prices is that at some point we're not going to be able to continue the production at the low price and cover our cost, but long term if we continue to many of them will be going into bankruptcy and out of business," she said. 

The national gas price average sits a $2.17 and the lowest price in the Columbus is $1.92. To find the cheapest gas prices near you, visit GasBuddy.com.

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