Gas Prices Almost $3 In Some Places As National Drop Continues - Forbes

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Topline

A gallon of gas costs just above $3 in Texas, Arkansas, Louisiana and Mississippi, as the national average dropped below $3.75 amid a nationwide decrease in prices, even as inflation remains high.

Key Facts

As of Saturday, Texas has the cheapest gas in the country, with the average gallon of gas costing $3.17, according to data from AAA, followed by Arkansas ($3.18), Mississippi ($3.19) and Louisiana ($3.22).

The national average for a gallon of gas dropped to $3.72 on Saturday, down 8 cents from a week ago and 39 cents from a month ago, although fuel pricing platform GasBuddy lists the average at $3.69 per gallon, the lowest since March 2.

Gas costs three-quarters of what it had at its peak of $5.02 in June, according to AAA.

A gallon of gas costs less than $3.50 in 18 states—Missouri, Kentucky, Tennessee, Oklahoma, Alabama, Georgia, South Carolina, Florida, North Carolina, Virginia, Delaware, Wisconsin, Iowa, Kansas, Texas, Arkansas, Louisiana and Mississippi.

It still costs more than $4 in nine states—Illinois, California, Nevada, Utah, Idaho, Oregon, Washington, Alaska and Hawaii—with California charging the most ($5.37).

The drop comes three days after oil prices fell to $80 per barrel—their lowest point since January—an indicator that a further drop in gas prices could be close behind, even as inflation remains at record levels.

Key Background

Gas prices skyrocketed amid record inflation, and as the price of crude oil spiked after Russia’s invasion of Ukraine in February threatened to cut back global crude oil supplies. Russia, the world’s second largest producer of oil behind the U.S., started selling less oil in retaliation to European and U.S. economic sanctions, and last week threatened to shut off the Nord Stream 1 pipeline to Europe if the European Union imposes price caps on Russian oil. Economists also attribute the spike to a drop in demand. The $4.33 per gallon average in March was the highest ever recorded in the U.S., passing the previous $4.11 record hit in July 2008.

What We Don’t Know

Whether gas prices will continue to drop. The national average is expected to keep falling, to $3.69 this weekend, according to Patrick De Haan, the head of petroleum analysis for GasBuddy.

Tangent

One of the primary reasons for the difference in the cost of gas is a wide margin in state taxes on gas. The highest is in Pennsylvania (57.6 cents per gallon)—where a gallon costs $3.93—while Alaska has the lowest tax (8.9 cents), according to data from IGEN. California, which is typically one of the most expensive states to buy gas, taxes 53.9 cents per gallon.