The national average cost of a gallon of gas has fallen to the bottom level in years as gas prices have finally dropped under $3.
A median gallon of gas now costs $2.97 within the U.S., price tracking app GasBuddy said in a report Monday. The last time gas prices were this low? May 2021, greater than 1,300 days ago.
Citing “seasonal weakness in demand” and oil prices under $70 per barrel, Patrick De Haan, the GasBuddy’s head of petroleum evaluation, said within the report that drivers will likely see more cost-effective gas prices into the vacation season. He predicts “the national average potentially falling one other 10 to fifteen cents by Christmas.”
But don’t schedule your cross-country road trip just yet: Not all gas price trackers show gas dipping under $3 per gallon. On Wednesday, auto club AAA reported a national average of $3.02.
While prices at the moment are below $2.50 at lots of the country’s least expensive gas stations, drivers within the priciest states will likely be lucky to search out gas prices under $3. Average prices are $4.48 in Hawaii, $4.29 in California and $3.91 in Washington. Regional differences in gas prices are influenced by state tax rates and access to gasoline supply.
Who gets the credit for lower gas prices?
The national average peaked at an all-time high in 2022 after Russia’s invasion of Ukraine and the resulting disruptions to global oil supply. In comparison with that $5.01 record high for U.S. gas prices, the present average is now over $2 lower.
GasBuddy said other aspects contributing to lower prices included improvements in U.S. refining capability and the upper rates of interest from the Federal Reserve, that are aimed toward slowing inflation. Higher rates make borrowing money dearer, which may slow economic activity and result in less demand for oil (aka cheaper prices on the pump).
Average gas prices falling below $3 marks a major milestone and offers more evidence that the worst of the country’s inflation problems are prior to now.
In actual fact, lawmakers may try and rating political points for lower pump prices this December. As noted in Axios, President-elect Donald Trump campaigned on bringing down gas prices, saying he could get the fee below $2 in speeches leading as much as the November election.
Nonetheless, De Haan said in a tweet that “Trump has absolutely nothing to do with prices today. None.”
