Gas Prices Could Soon Dip Below $3 in These States - Is Yours One?




  • In Business
  • 2022-08-13 23:08:19Z
  • By GOBankingRates
Fang Zheng / iStock.
Fang Zheng / iStock.  

As summer winds down, gas prices are slowly starting to fall despite an economy in turmoil.

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Some states are seeing prices in the $3 range, numbers not seen since the beginning of the Russia-Ukraine war. In June 2022, prices at the pump exceeded $5 per gallon.

Experts say the national average may fall below the $4 mark soon, as 21 states already have prices of $3.95 and under, according to aaa.gasprices.com.

Patrick De Haan, head of petroleum analysis for GasBuddy, told TheStreet that prices in a few states could even drop below $3 within the week. The states most likely to benefit from such a steep dip would be Texas, South Carolina, Oklahoma, Georgia, Arkansas, Tennessee, Mississippi, Alabama, Louisiana and Kentucky.

Such a circumstance would put prices lower than this time last year, when the national average was $3.18 for regular unleaded, based on AAA figures.

Why Are Gas Prices Falling?

Gasoline prices are determined by the price of crude oil, which varies based on supply, consumer demand and other factors. Taxes also play into prices, and many states have enacted "gas tax holidays" this summer to help consumers fill their tanks.

Domestic supply increased last week by 4.5 million barrels (to a total 426.6 million), which is helping to drive prices down, AAA reported.

Crude oil prices fell last week, with West Texas Intermediate, one of the benchmarks, dipping below $90 a barrel - its lowest price since Feb. 10. Brent crude, another benchmark, fell to $95.

Are There Fewer Drivers on the Road?

Most of the aforementioned metrics bode well for further declines.

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However, that's not necessarily good news for the economy. One reason for the price drop is a reduction in demand for gas as drivers cut back. A recent AAA survey found that 64% of U.S. adults had changed their driving habits since March, when prices first started rising. Twenty-three percent said they made "major changes," including driving less (88%), combining errands (74%) and shopping and dining out less frequently (56%).

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This article originally appeared on GOBankingRates.com: Gas Prices Could Soon Dip Below $3 in These States - Is Yours One?

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