The nationwide average price of a gallon of gas has fallen to $4.78 this morning, according to AAA. It remains $1.65 higher than one year ago but has fallen from an all-time high of $5.02, recorded just last month.
Ten states still have an average price above the $5 line. But “about 80% of stations are now selling regular for under $5 a gallon,” said Andrew Gross, AAA spokesperson.
What Did It? Americans Drove Less
The price at the pump began to soar in March when Russia’s unprovoked invasion of Ukraine destabilized world petroleum markets. From the start of the gas price crisis, experts warned that prices might not come down until demand did.
Governments took several steps to try to get prices under control. The federal government began releasing up to 1 million barrels of oil daily from strategic reserves and allowed refiners to mix in more ethanol than pollution regulations normally permit. Several states enacted gas tax holidays.
But those steps did little to reduce prices.
Related: High Gas Prices Have Americans Search for More Efficient Cars. Dealers Are Low On Them
Recession fears, however, seem to have done the trick. According to the U.S. Energy Information Administration, Americans burned 8.92 million barrels of gasoline the week ending June 24 (the last week for which data are available). That’s almost 3% less than one year ago.
Apart from 2020, when COVID-19-related travel restrictions had Americans staying home, it’s the lowest figure for the third week of June since 2014.
It May Not Last
Prices could continue to fall for several weeks, some analysts say. Patrick De Haan, head of analysis for Gas Buddy, tweeted on Tuesday that oil prices could see “a potential decline of 40-65 cents per gallon in the weeks ahead.” A dip in the price of oil usually leads to a dip in the price of gasoline about a week later.
However, America’s driving habits traditionally peak in late summer. AAA’s Gross explains, “July is typically the heaviest month for demand as more Americans hit the road, so this trend of easing prices could be short-lived.”
Related:
- What Rising Gas Prices Actually Cost You
- Gas Prices: How Hypermiling Saves You Money
- How to Get Better Fuel Economy in Your Vehicle
