Motorists have benefited from a sharp drop in gasoline prices in recent weeks – and the good times are expected to continue.
Gasoline prices have fallen about 13% from their peak in April 2024, a drop of nearly 50 cents per gallon, according to AAA data shared with ABC News.
According to AAA data, the national average price of a gallon of gasoline is $3.20. In five states, the average price of a gallon of gasoline is less than $3: Georgia, North Carolina, Wisconsin, Kansas and Iowa.
Speaking to ABC News, some experts predicted that the national average price would likely follow the same path, dropping below $3 a gallon for the first time since May 2021.
National average gas prices as of 09/17/24
AAA
The price decline is partly due to weak demand for gasoline as the busy summer season gave way to a fall slowdown, experts said. At the same time, they added, a sharp drop in crude oil prices has led to an even steeper drop in gasoline prices than is typically seen at this time of year.
“Gas prices continue to collapse across the country,” Patrick de Haan, head of oil analysis at GasBuddy, told ABC News. “The outlook is good.”
Much of the relief for consumers, experts say, comes from seasonal fluctuations that occur each fall.
The slowdown in travel reduced demand for gasoline as families returned from summer vacations and resumed the usual driving associated with work and school trips.
Along with this slowdown in demand, refineries have begun to shift to a less expensive winter fuel blend. Refineries are subject to fewer Environmental Protection Agency (EPA) regulations during the cooler fall and winter months, allowing them to use a less expensive fuel blend.
“This is something we see every year,” AAA spokesman Andrew Gross told ABC News.
The price drop is also due to the sharp drop in the price of crude oil, the raw material that refineries turn into gas. The price of Brent crude oil has fallen 21% over the past year and more than 7% in the past month.
The surge in oil production has coincided with a global economic slowdown, which in turn has reduced demand for crude as consumers cut back on spending and companies cut production. The resulting imbalance between supply and demand has sent prices plummeting, experts say.
“The supply is pretty good and the demand is weak,” Timothy Fitzgerald, a professor of business economics at Texas Tech University who studies the oil industry, told ABC News.
A person fills up his car with gas in this undated file photo.
STOCK PHOTO/Getty Images
Gas price declines are expected to continue. Gas prices typically decline during the fall as demand declines and cheaper winter fuel blends take hold.
“Nearly every state east of the Rockies now has retail outlets selling gasoline for less than $3 a gallon, and the national average could very well follow suit in October,” Gross said.
However, the expected relief in prices could be offset by a series of possible disruptions, experts said. Hurricane season could send a storm barreling through major Gulf of Mexico refineries, knocking production offline and reducing gas supplies. On the downside, an economic boost, perhaps triggered by widely expected interest rate cuts, could lead to higher demand for oil and gas, de Haan said.
“We’re watching for some unpredictable factors,” he added. “Other than that, there’s not much that could cause a big spike in gasoline prices.”
However, early next year, seasonal fluctuations will work against consumers as demand for gasoline begins to increase, he added.
“Take advantage of those seasonal lows,” de Haan said.
