Gas prices have fallen across South Jersey over the past month from $3.64 to $3.38 and are expected to drop more over the holidays, according to AAA Mid-Atlantic.

Drivers in New Jersey are still paying about 7 percent more than a year ago, when the average price per gallon was $3.16 for regular unleaded.

Drivers in Atlantic and Cape May counties are paying a penny less than the state average price, suggesting the supply-chain problems from Hurricane Sandy that kept prices high in South Jersey last month have been resolved, said Jim Lardear, director of public and government affairs for AAA Mid-Atlantic.

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"Supply and distribution issues are working their way out of the price in New Jersey, which has seen the ninth-biggest drop across the country in the past month," he said.

Delivery of crude oil and the production of gasoline was hampered by the Oct. 29 storm, which temporarily closed New York Harbor and shut down refineries along the Arthur Kill waterway, said Scott Ross, spokesman for the New Jersey Petroleum Council, which represents the oil and natural gas industry.

"In Atlantic City we had a major disruption in our supply. So it takes time to work that through the system and get our terminals and refineries back up and running," he said. "It only takes a week of not being able to move product in the traditional way to cause a hiccup in pricing. We're back on track now."

New Jersey still has the 19th most expensive gas in the nation. Topping the list, as always, is Hawaii at $4 per gallon. The lowest price in America is found in Missouri at $3.02.

But unlike motorists in a lot of states, drivers in New Jersey also pay highway and bridge tolls.

"Any time gas prices go down, it's good news for my members," said Sal Risalvato, director of the New Jersey Gasoline Convenience and Automotive Association.

His trade group represents about 1,500 gas stations, convenience stores and mechanic shops.

When retail prices drop, retailers have to spend less in capital to refill their tanks. It can cost $34,000 or more per tanker truck, Risalvato said.

"That's a lot of capital for a small business to put into inventory," he said.

And when gas prices drop, retailers can reap more profits per gallon, he said.

"As the price goes down, the retail margin grows by 2 or 3 cents. When it goes up, the margin shrinks. So they look forward to prices coming down," Risalvato said.

Gas prices are not far from the mind of Tim Kilroy, 49, of Somers Point, who delivers Chicago- and Sicilian-style pan pizzas for Mama Mia's Ristorante in Egg Harbor Township.

"My delivery area is huge. Some deliveries are 12 miles round-trip. I drive probably 50 miles a day," he said.

A savings of a quarter per gallon is not much reason for celebration, he said, especially when he often finds much cheaper gas lately in central New Jersey when he visits his brother.

Customers haven't offered better tips to compensate for the higher gas prices, he said.

"They should," he suggested.

Peter Bisher, 37, of Somers Point, is a driver for Emilio's Pizza in Somers Point. When gas prices are this high, Bisher said he puts as little as $5 in the tank of his six-cylinder Chevrolet Camaro to get him through a day.

"Sometimes I go through $60 a week in gas," he said. "I try to cut back on other things, but right now I'm spending more on gas than maintenance on the car."

The good news is prices are expected to continue trending down over the Christmas holidays, AAA’s Lardear said.

"It's a very long holiday week. People tend to want to travel to be with family and friends. Seeing the relief now as prices come down is refreshing for motorists," he said.

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