AAA: gas prices could fall through Jan. 1

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KNOXVILLE, Tenn. (WVLT) -- Like many University of Tennessee students, Deshone Mcaeoo is heading home for the holidays and cheaper gas is good news.

"Yeah it's good, so it's easy for me to get up and down the road," said Mcaeoo.

"It's good because it costs about $80 to fill mine up," said Amy Trent, who also likes the lower prices at the pump.

AAA said the average price of gas in Knoxville is about $3.05 per gallon and said prices have dropped across the country for the past several weeks because of low demand.

"First of all, we just have more fuel-efficient cars out there. The economy hasn't been as good as it could have been. And in addition, Hurricane Sandy. All of that travel that might have happened in that part of the country. There's a lot of cars up that way. A lot of cars were destroyed and a lot of travel was postponed or didn't happen," said Don Lindsey, director of public affairs for AAA Tennessee.

He said if nothing changes overseas, drivers can expect prices to fall through the first of the year. Lower oil prices could also affect how much you'll pay to fly during the holidays.

"The airlines themselves set the fares for the flights. And in doing so, one of the biggest indications for doing so is fuel costs. So if fuel costs go down, their costs go down in operating that flight," said Becky Huckaby, spokesperson for the McGhee Tyson Airport.

Welcome news to many:

"I'm in college right now, and it's not really easy to pay $400 to fly home and back," said Nick Jursik, who is flying home for Christmas.

"That's good news - it'll open up the travel industry. People will travel more, I'm sure of it. Going on vacations," said Jay McDonald, who plans to fly in January.

If they save money on gas or airfare, most said they plan to spend it on presents for their loved ones.

While gas prices are falling, AAA said they're actually slightly higher than they were at this time last year, when the average price was about $2.99 per gallon.

It said gas in Knoxville peaked around $3.70 in April.

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