Gas prices could soon fall back below $3 a gallon in your neck of the woods — if they haven't already.
Prices for regular gasoline are now below $3 at one in 10 gas stations around the country, according to a report by GasBuddy, an app that tracks real-time fuel prices. And forecasts indicate the nationwide average could reach $2.99 or lower this fall.
The national average is $3.68 on Tuesday. That's down 25 cents in the last month and down 7 cents from last week.
Gas prices have taken drivers on quite a rollercoaster ride in 2022. They rose at the fastest pace ever earlier this year, with the U.S. average hitting a record high of more than $5 in mid-June. Today’s price represents a 26.7% decline from that peak.
Prices are still higher than they were a year ago, when the average gallon of gas was $3.16, and remain well above pre-pandemic levels. In Sept. 2019, average gas prices in the U.S. were just under $2.60 per gallon.
When could gas prices fall below $3?
GasBuddy’s projections forecast the national average falling to $3 in late October if oil prices don’t “materially rise” in the weeks ahead.
“Oil has shown weakness as of late,” said Patrick De Haan, the company’s head of petroleum analysis. “The wholesale price of gasoline has dipped to the point where it has opened up the window that $2.99 is possible.”
But to pump the breaks, it’s important to remember that forecasting oil and gas prices is always an inexact science. Moreover, officials including Treasury Secretary Janet Yellen say we could be looking at higher oil prices on the horizon due to new sanctions on Russia. (Crude oil prices are responsible for 54% of what a gallon of gas costs.)
It’s also still hurricane season, and while August was thankfully a calmer-than-normal month, it’s unclear what the rest of the season will bring. Severe storms can disrupt operations at refineries and offshore oil platforms, hampering supply.
In light of these concerns, and others, De Haan has some doubts the national average will actually drop below $3.
“It might not be possible — hurricanes, unexpected issues that arise, E.U. sanctions on Russian energy, economic concerns, COVID in China, if demand in the U.S. doesn't fall in autumn as it tends to do — there’s many different things that could change the outcome,” he said.
On Monday, West Texas Intermediate crude oil prices were trading around $88, which compares to a recent high in early June just above $122.
In Texas, the average price of gas is $3.10 per gallon, the lowest in the nation, and a total of 10 states have average prices below $3.30. Gas is typically cheaper in Gulf States and other areas of the South thanks to low taxes and proximity to refineries.
It’s a different story in other parts of the country, where the pain at the pump is still very real. The average price of gas in California is $5.32 per gallon, and it’s nearly as bad in Hawaii — $5.22. Eight states, all in the western part of the country, are still above $4 per gallon. The higher prices out west are partially due to recent refinery issues in California.
The American Automobile Association (AAA), in a Monday report, said gas prices will likely continue to decrease in the weeks ahead if demand for gasoline subsides as it usually does after Labor Day.
“With fall approaching, more markets could soon see prices below $3 per gallon,” AAA spokesperson Andrew Gross said.