After a strange year of gas price changes, one that affected everything from world affairs to American politics, the average price is once again heading downward.
GasBuddy said Tuesday that gas prices have reached their lowest level in 18 months. And at Christmastime, prices will be nearly $2 lower than they were at their height earlier this year.
Furthermore, the average price will likely go below $3 per gallon by Christmas for the first time in nearly two years.
“As 2022 draws to a close, we’ve seen gas prices cut nearly in half in some areas compared to this earlier this year — a well needed break from the sky high prices we faced just six months ago. Finally, things are starting to feel a bit more normal with gas prices far more affordable. Americans are saving around$25 per fill-up compared to prices this summer,” Patrick De Haan, head of petroleum analysis at GasBuddy, said in the blog post.
“While we’re closing out the year on a positive note, challenges remain that could drive prices up again next spring, so motorists might want to keep their expectations in check and enjoy the sub-$3 gasoline while they can.”
The day before, GasBuddy reported that gas prices had dropped for the sixth consecutive week, to an average of $3.09 per gallon. The most commonly encountered price was $2.99 per gallon. Texas was the state with the lowest average price, at $2.57 a gallon, followed by Oklahoma ($2.57) and Arkansas ($2.66).
Two weeks ago, the average gas price dropped to below the average from a year earlier, for the first all year.
Another report this week, from AAA, found that the average price was $3.14, a 12-cent reduction from the previous week. AAA also said that 20 of the 50 states now have average prices below $3.
“The cost of oil, gasoline’s main ingredient, has been hovering in the low-to-mid $70s per barrel, and that’s $50 less than the peak last Spring,” Andrew Gross, AAA spokesperson, said in the post. “Combined with low seasonal demand, gas prices could slide a bit more before leveling off.”
Nevada, according to AAA, posted a 20-cent decline in the average gas price since the week before, while Indiana saw a 19-cent drop, Arizona dropped 17 cents, and Ohio, Washington, and Delaware each saw a drop of 16 cents.
Why have gas prices dropped so much, with the Russia/Ukraine war still ongoing? There are a few reasons for that. It can be attributed to “soft demand, recession fears, rebounding supply and the absence of a major disruption to Russia’s oil flows,” CNN reported this week.
Last week, the Department of Energy announced plans to begin replenishing the Strategic Petroleum Reserve. The White House, during the gas price spike earlier this year, had begun tapping the SPR in order to combat rising gas prices. The SPR has been tapped for a total of 180 million barrels this year, Axios reported.
“This repurchase is an opportunity to secure a good deal for American taxpayers by repurchasing oil at a lower price than the $96 per barrel average price it was sold for, as well as to strengthen energy security,” the Department of Energy said.
“This initial step to fulfilling the President’s replenishment strategy follows his historic release from the SPR to address the significant global supply disruption caused by Putin’s war on Ukraine and provide a wartime bridge for domestic production to increase. The releases have helped lower gas prices for American families.”
The Wall Street Journal reported this week that the U.S. government is expected to reap a windfall.
“The Energy Department, empowered by October rule changes that give it more flexibility in such purchases, is able to wait for favorable prices as it begins to refill more of the SPR’s skyscraper-sized underground storage caverns, a senior administration official said, adding that the process will likely take months and years,” the Journal said. “On Friday, the department solicited bids for 3 million barrels from a U.S. supplier starting in February.”
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Stephen Silver is a Senior Editor for 19FortyFive. He is an award-winning journalist, essayist and film critic, who is also a contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.
