Gas prices have plunged by more than 38 cents a gallon locally since the largest crude distillation unit at the BP Whiting Refinery was restarted last week, and they continue to fall.
One industry observer said $2-a-gallon gas could be coming soon. Drivers could already buy gas for as little as $2.28 a gallon Tuesday at a Murphy USA Station at Morthland Drive and Frontage Road in Valparaiso.
The average retail gas price in the Gary metropolitan area was $2.59 a gallon as of Tuesday afternoon, and it's trending down, according to GasBuddy.com. The national average fell nearly 13 cents to an average of $2.47 a gallon Monday.
"Nationally, gas prices saw their largest weekly drop of the year," said Patrick DeHaan, GasBuddy senior petroleum analyst.
"Prices moved lower in all but one state, Utah, with plunges at the pump throughout the Great Lakes as a result of BP's Whiting, Ind., refinery coming back online. The national average now stands at its lowest point since April, a fitting way to close out the summer driving season with Labor Day approaching.
"While oil prices rallied late last week, I don't yet expect it to impact pump prices, as they still have some catching up to do with the drop in crude oil prices. Since June 30, oil prices have fallen 23 percent while retail gasoline prices have fallen about half that amount, so gasoline prices will move lower again this week."
The breakdown of the largest of three crude distillation units at the refinery Aug. 8 caused gas prices to spike at a record pace, by as much as $1 a gallon in some parts of the Midwest. Indiana, Illinois and Michigan politicians demanded answers and called for investigations. The online publication Quartz said it was another self-inflicted hit for the oil company in an articled called, "BP can't stop putting itself in the line of fire."
BP was able to successfully restart the unit last week and gas prices have since fallen across the Midwest, even though they normally stay high until after the Labor Day weekend when many people embark on one last summer road trip.
Gas prices in Gary are more than 90 cents lower than they were a year ago, though they're still higher than they were last month. Nationally, gas prices are 96.4 cents per gallon lower than at the same time in 2014, after falling 19.5 cents per gallon over the last month.
Retail gas prices could fall under $2 per gallon in coming months, Schneider Electric's Brian Milne forecasts. He predicts downward pressure from the sliding price of crude oil, an expected glut of Iranian crude, an improving economy, no timetable for a Fed rate hike, and a continued war between U.S. and Saudi Arabian shale producers.