Many Factors Play Into Low Indiana Gas Prices

Hoosier drivers are enjoying lower than normal gas prices and a lot of factors are playing into the drop.

The end of summer driving season, the change to less expensive winter gas supplies and well-functioning Midwest refineries are some of the reasons. But, Purdue University energy economist Wally Tyner says the biggest factor is that crude oil has fallen more than $20 per barrel since the summer.

"For every dollar that crude oil falls, that ultimately translates to 2 ½ cents at the pump, so a $20 drop in crude oil is 50 cents at the pump," says Tyner

Crude oil is down because of slow economic growth around the world, meaning less demand for gas that the U.S. exports and everything else, which could drag the economy down.

"If growth is slower in the rest of the world, then they are going to buy less of our stuff and that means less jobs to produce that stuff," explains Tyner. 

Also contributing to falling crude prices is the dramatic increase in the production of shale oil, which has helped more than double the amount of oil the U.S. produces.

On Tuesday, Indiana’s average gas price was at $3.16 a gallon.