For the first time since May 2021, the average price of gasoline in the United States has fallen below $3 per gallon, offering welcome relief for consumers after years of soaring inflation.
Steady Decline Since Summer
Fuel prices have been dropping steadily since the end of the peak summer driving season, providing a boost to consumer spending despite broader inflationary pressures persisting in October. According to GasBuddy.com, the national average for regular gasoline hit $2.97 on Monday.
State-by-State Variance
Oklahoma boasted the lowest average price at $2.42 per gallon, while Hawaii recorded the highest at $4.48. The affordability of gasoline is at its lowest non-COVID level since 2015, said Patrick De Haan, head of petroleum analysis at GasBuddy, who predicted prices could fall another 10 to 15 cents by Christmas.
Increased Supply Eases Pressure
The dip in prices is attributed to improved refining capacity in the U.S. and globally, mitigating supply shocks caused by events like Russia’s invasion of Ukraine, which had pushed gas prices to a record high of over $5 per gallon in 2022.
U.S. oil refining capacity increased for the second consecutive year, with additional capacity coming online from large international plants, such as Nigeria’s 650,000 barrels-per-day Dangote refinery and Mexico’s 340,000 barrels-per-day Dos Bocas refinery.
Slower Demand Growth
Demand for gasoline has also stabilized after the post-pandemic surge, growing by only 11,000 barrels per day in the first nine months of 2023 compared to the same period last year, according to the U.S. Energy Information Administration.
As gas prices continue to fall, consumers nationwide are likely to benefit from further savings at the pump during the holiday season.
