SAN FRANCISCO (KCBS RADIO) – U.S. motorists might soon see something that hasn’t happened in years: average gas prices under $3. However, we’re not there yet.
Data from AAA showed that the national average gas price as of Tuesday was $3.144. That was slightly up from the Monday average of $3.140, but down from last week’s average of $3.150, the $3.218 average from one month ago and the $3.501 average from one year ago. Last week, the Consumer Price Index report from the Bureau of Labor Statistics showed that the energy index rose 0.9% in June as the gasoline index increased 1% over the month.
Some states already have average gas prices under $3, based on AAA data. As of Thursday, they included many states in the Southern U.S. and in the Central part of the country. On the other hand, California and Washington still had prices higher than $4.
Still, Reuters noted this week that “gasoline prices have been in a lull in recent months,” and called it a “boon for Americans travelling this summer.” According to the outlet, prices are poised to fall even lower to figures not seen in four years. It attributed the expected fall to bad weather dampening fuel demand and a jump in imports.
NerdWallet recently explained that the average per-gallon price of regular gas was $2.601 back in 2019, before the COVID-19 pandemic, citing U.S Energy Information Administration data. After Russia began its invasion of Ukraine prices started creeping up until they hit a peak average higher than $5 in June 2022.
“Since then, gas prices have retreated, but they haven’t returned to pre-pandemic levels. Today, gas prices are about 9% higher than they were six years ago,” said NerdWallet.
This year, things seem to be moving in the opposite direction, according to Reuters. It reported that gasoline prices fell 8.3% over the 12-month period that ending in June, “as U.S. crude prices tumbled more than 20% amid concerns over lackluster demand and a trade war with China,” spearheaded by U.S. President Donald Trump.
With lower oil prices, refiners’ costs typically decrease and some of those savings can be passed along to consumers, Reuters said.
Furthermore, it noted that fuel demand for the week ending on July 4 (usually a period of high consumption) was down 2.5% from the same time last year.
“Analysts said the slowdown was likely due to extreme heat blanketing parts of the country, which may have discouraged some driving,” Reuters explained.
Patrick De Haan, head of petroleum analysis at GasBuddy, predicts continued weakness over the coming months.
“The national average has a good chance of falling below $3 per gallon in September,” he said, as quoted by Reuters. Additionally, DeHaan said that OPEC’s decision to boost crude production by a larger-than-expected 548,000 bpd in August could also contribute to prices coming down.