By T.J. Winnick & Brian Morton

July 29, 2008

WASHINGTON D.C. -- Gas prices are falling across the country, with the national average now at $3.99 a gallon.

In Medford the average is down four cents a gallon from last week but up dramatically from a year ago. Last summer drivers in Southern Oregon were paying $2.86 a gallon. Experts say the recent price drops can be related to a dramatic reduction in the miles Americans are driving. According to the U.S. Department of Energy, Americans have driven 40-billion miles less in the past seven months than they did the year before. That has caused the demand for motor gasoline to fall by 2.4 percent.

"What we're seeing is a fundamental shift in the way Americans are making decisions about their travel habits," says James Ray of the Federal Highway Administration.

While national gas prices fell below four-dollars a gallon for the first time since early June, prices are 38-percent higher than this time last year.