Gas price decline nears 40 cents

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NEW YORK (CNNMoney.com) -- Gasoline prices have fallen nearly 40 cents a gallon from their record highs after 34 straight days of declines, according to a daily survey released Wednesday.

The price of regular gasoline fell to $3.717 a gallon from $3.73 a day earlier, according to a survey of gas station credit card swipes from motorist group AAA and the Oil Price Information Service.

Gas prices have fallen more than 9% since hitting a high of $4.114 a gallon in mid-July, but have gained more than 90 cents over the last 12 months.

There have been several indications that high fuel costs have triggered many Americans to change their habits.

The Energy Department reported Wednesday that gasoline demand has averaged about 9.5 million barrels per day over the past four weeks, which is 1.6% lower than the same period last year.

Meanwhile, a MasterCard SpendingPulse report released Tuesday showed demand for gas has dropped more than 4% from year-ago levels.

As pump prices fall, demand may begin to recover. But it is too early to tell how the falling price of gas will affect demand, according to Beth Heinsohn, senior editor with the Oil Price Information Service.

It will take more than four weeks of data to see if there's a correlation, Heinsohn said. "We have yet to see a really rock-solid measure of consumer behavior," she said.

The recent slide in gas prices comes amid a 22% decline in crude futures from the record $147.27 a barrel they scaled last month.

Diesel: Diesel fuel, which is used to power most trucks and commercial vehicles, fell to $4.359 a gallon from $4.373 a day before, according to AAA.

Because of its use in shipping and transportation, high diesel prices can drive up operating costs, which companies then pass along to buyers by raising prices.

High fuel prices were partially responsible for driving wholesale prices up 9.8% over the past 12 months, the sharpest yearly jump since the 1980s.

Ethanol: The price of E85, an 85% ethanol blend, fell to $3.035 a gallon on average from $3.041, AAA reported.

Expensive petroleum-based fuels have helped raise the profile of corn-based ethanol, which can be used as a gas alternative in specially configured "flex-fuel" vehicles.

However E85 fuel is difficult to find outside the corn-producing midwest region, and is not sold in some states. It also generally burns less efficiently than gasoline.

According to AAA estimates, drivers of flex-fuel vehicles running E85 would have to pay the equivalent of $3.994 a gallon to get the same mileage as gasoline.

State prices: Gasoline remained above an average of $4 a gallon in four states, according to AAA: Alaska, the most expensive state at $4.576 a gallon, Hawaii at $4.435 a gallon, California at $4.018 and Utah at $4.014.

The cheapest gas on average was found in Missouri at $3.484 a gallon, followed by South Carolina at $3.496.

Diesel prices were most expensive in Hawaii, with drivers paying an average of $5.309 a gallon. Diesel was cheapest in Missouri, where prices fell to an average of $4.085.