- Gas prices reaching multi-year lows
- Unleaded under $2 a gallon in many states
- OPEC price war exacerbating the situation
- Prices expected to keep falling
As measures to combat the spread of the coronavirus take hold across the country, you’ve no doubt seen images of empty freeways and city streets. The White House has asked Americans to avoid discretionary travel. Some cities and states have imposed shelter-in-place orders, and millions are working from home. The result is a dramatic drop-off in driving, with an attendant fall-off in demand for gasoline. One immediate and highly visible result is plummeting gas prices.
$2.13 per gallon, and going lower
According to data from AAA, the national average price per gallon of unleaded as of Monday, March 23 was $2.13, with 21 states—mostly in the South and Midwest—at less than $2 per gallon. That’s 35 cents below where it was just a month ago, and the lowest price in four years.
The states with the lowest prices today are Oklahoma at $1.72 and Ohio at $1.79. Only two states remain above $3/gallon: California at $3.20 and Hawaii at $3.46.
And economists say gasoline prices have further to fall as the COVID-19 virus exacts an increased toll on economic activity. Experts say the national average price for unleaded could sink below $2 a gallon by the end of March.
Typically, we’d expect to see prices rise with the onset of the summer driving season in a couple of months, but no one knows whether there will even be a summer driving season this year.
OPEC’s problems further driving oil prices down
As dramatic is the decline in driving and drop-off in consumer demand has been, there’s an even bigger issue at play, and it has to do with oil supply. Earlier in March, the OPEC oil-producing nations were attempting to negotiate a production cut in the face of the global slowdown in demand. Those talks collapsed, news that sent oil prices skidding more than 10 percent in a single day and accelerated the global selloff in financial markets.
Without such an agreement, the two biggest producers, Saudi Arabia and Russia are now planning to increase production, as they engage in a price war that is putting further downward pressure on prices. U.S. oil prices have fallen by half in less than a month, and crude oil prices have fallen to levels not seen since 2002.
Stay safe at the pump
Unfortunately, this ordinarily happy circumstance for drivers comes under a cloud of a serious health scare a time of economic turmoil. That means these low prices are unlikely to spur increased consumption. But for those who are planning to top up your tank with cheap fuel, be sure to follow best practices to reduce possible contact with the COVID-19 virus on gas-pump handles or pay pads. Read more about how to do that here.
More Coronavirus Coverage
- More deals and incentives being offered
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- Continuing coverage and daily updates
