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Average gas prices in Lincoln drop below $4 a gallon

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Gas Pump, 8.4

Average gas prices in Lincoln dropped below $4 a gallon for the first time in nearly three month, offering relief to commuters.

For the first time in nearly three months, the average price of gasoline in Lincoln has dropped below $4 a gallon.

As of Thursday morning, gas in the Capital City cost $3.998 a gallon on average, according to AAA. That's down about 8 cents from a week ago and 71 cents from a month ago.

But it's still nearly $1 more than at this time last year, and the cheapest prices for gas in Lincoln remain well above gas prices available in Omaha.

Local gas prices surged above $4 a gallon in early May, pushing past that mark for the first time in more than 14 years, and they hit an all-time record high of $4.80 a gallon in mid-June, driven by a range of factors including increased demand and a surge in oil prices after Russia invaded Ukraine earlier this year.

According to Gas Buddy, the cheapest gas in Lincoln was available at the membership clubs -- Sam's ($3.64) and Costco ($3.65). In the Omaha area, gas at the same warehouse clubs was $3.07 on Thursday.

The statewide average also has fallen below $4 a gallon, sitting at about $3.97 as of Thursday. According to AAA, Nebraska had the fourth-largest decline in prices among states in the past week, with an average drop of 21 cents.

Prices have declined thanks to a drop in oil prices, a decline in demand for gasoline and fears of a recession.

The decline in demand was somewhat due to people changing their driving habits. In a survey, AAA found that 64% of U.S. adults changed their driving habits or lifestyle since March, with 23% making “major changes.”

Average gas price now tops $4 in Lincoln

"We know that most American drivers have made significant changes in their driving habits to cope with high gas prices,” Andrew Gross, an AAA spokesperson, said in a news release earlier this week.

However, Gross said that with average prices below $4 at more than half the gas stations in the U.S., it could rekindle demand and lead to prices going back up.

But any surge doesn't seem likely to happen anytime soon. On Wednesday, oil prices hit six-month lows after data from the U.S. Energy Information Administration showed a rise in supply of both crude oil and gasoline. In addition, OPEC said it would raise its oil output by 100,000 barrels per day.

The national gas price average has declined for 51 days in a row, and Patrick De Haan, head of petroleum analysis at GasBuddy, said in a blog post earlier this week that most areas of the U.S. are likely to continue to see a decline in prices, especially if oil prices remain stable or drop further.

Tax credits available for Nebraska retailers that sell fuel with higher ethanol blends

Reach the writer at 402-473-2647 or molberding@journalstar.com.

On Twitter @LincolnBizBuzz.

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Business reporter

Matt Olberding is a Lincoln native and University of Nebraska-Lincoln graduate who has been covering business for the Journal Star since 2005.

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