Gas prices are plunging around the U.S., and any day now drivers could be paying less at the pump than they did a year ago. The national average is likely to dip below $3 in the coming weeks as well.
The price for a gallon of gas has fallen by about 32 cents in the past month, dropping from $3.77 to the current national average of $3.45, the driving club AAA said in a new report.
“Increasing supply and steady gasoline demand have contributed to pushing pump prices lower. As demand remains low and stocks grow, drivers will likely continue to see pump prices decrease through next week,” the report said.
That means gas prices could soon be cheaper than they were 12 months ago. The national average was $3.38 this time last year.
Patrick De Haan, head of petroleum analysis at the price comparison app GasBuddy, agrees that prices are bound to fall further — perhaps even below the $3 mark nationally before the end of the year.
“It’s entirely possible the national average price of gasoline could fall under $3 per gallon by Christmas, which would be a huge gift to unwrap for motorists after a dizzying year at the pump,” De Haan wrote in a report earlier this week.
The national average for a gallon of gas was roughly $3.30 at the end of 2021. Prices spiked in early 2022 after Russia invaded Ukraine, ultimately reaching an all-time high in June just above $5.
Where gas prices are cheapest
Americans typically drive less this time of year as cooler temperatures set in, which reduces the demand for gasoline.
Oil prices have fallen due to a variety of global market factors, including concern that lockdowns in China will bring down demand and the recent news that the Biden administration is allowing Chevron to export crude oil from Venezuela. However, oil prices could fluctuate in the coming days because OPEC+ met on Sunday to consider its output levels.
On Friday, oil prices were trading at around $81 a barrel, which is down from about $89 a month ago, according to the West Texas Intermediate measure. Crude oil prices are responsible for 54% of what a gallon of gas costs drivers at the pump.
Average gas prices are below $3 now in a handful of states, all of which have dropped below that level only in the past 15 days. Gas is cheapest in Texas ($2.82) followed by Oklahoma ($2.94), Arkansas ($2.96), Mississippi ($2.97) and Georgia ($2.99). For about a 10-month stretch from February to November, the average gallon cost more than $3 in all 50 states.
Gas prices even fell below $5 in California last week, dropping 23 cents to $4.86.
That leaves Hawaii as the only state where gas is still above $5. The average gallon costs $5.18 on the islands.
Prices remain above $4 in four other states in the West. After Hawaii and California, the most expensive state averages are Nevada ($4.56), Washington ($4.39), Oregon ($4.27) and Alaska ($4.23).
© Copyright 2022 Money Group, LLC. All Rights Reserved.
This article originally appeared on Money.com and may contain affiliate links for which Money receives compensation. Opinions expressed in this article are the author’s alone, not those of a third-party entity, and have not been reviewed, approved, or otherwise endorsed. Offers may be subject to change without notice. For more information, read Money’s full disclaimer.
Add a Comment
Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.