American motorists could pay significantly less at the pump this Labor Day, with gasoline prices expected to be the lowest on the holiday in three years.
Continuing a recent downward trend, the national average gas price will drop to $3.27 per gallon on Labor Day, GasBuddy predicts in its annual Labor Day travel forecast. The price is projected to be 50 cents lower than the $3.77 average a year ago, meaning drivers will pay 13 percent less.
GasBuddy estimates that Americans will spend about $750 million less at the pump this Labor Day than they will over the three-day weekend in 2023.
“It doesn’t hurt much compared to two summers ago, when you could see oil prices hovering around $6 in Chicago,” Patrick De Haan, head of oil analysis at GasBuddy, told CBS News Chicago. “Prices have been plummeting since mid-July,” he added.
Gasoline prices have fallen since peaking at $3.69 a gallon in mid-April as lower demand and fewer refinery shutdowns help keep costs down. U.S. gasoline inventories are 3% above year-ago levels, according to the U.S. Energy Information Administration.
“We are witnessing perhaps the best opportunity in years to get the national average below $3 a gallon,” De Haan said in a statement.
Lower seasonal demand and cheaper winter gasoline are looming, De Haan noted, making it likely that tens of thousands of stations across the country could have gas for less than $3 closer to Thanksgiving.
“The arrival of September means cheaper winter gasoline is almost here, which always helps take the pressure off pump prices,” said AAA’s Andrew Gross. Weak demand and lower oil prices could lead to further declines in gasoline prices, he added.
That said, prices vary depending on location. Weekly regional cost variations can be found by checking the CBS News website Price tracking.
Gas is generally more expensive on the West Coast because of factors such as the region’s limited interconnections with other major refining centers (including the Gulf Coast) and gas specification requirements that are more expensive to produce, according to the EIA.
Last month, storm-related refinery outages led to a slight increase in gas prices in the Midwest.
In Florida, Hurricane Debby threatened Gulf Coast oil production after making landfall earlier this month, but ultimately did not have a significant impact on refining activity or oil demand, the federal agency noted.
Hawaii has the highest gas prices, with an average of $4.65 a gallon, followed by California and Washington, with $4.62 and $4.16, respectively, according to a AAA report. In Nevada, a gallon of gas costs an average of $3.96, and in Oregon, it costs $3.79.
Conversely, gasoline is cheapest in Mississippi, where the average gallon costs $2.88, followed by Oklahoma and Texas, where it costs $2.94. In Tennessee, a gallon of gasoline costs $2.95, and in Louisiana, it’s a penny more, at $2.96 per gallon.
