Gas prices drop by almost 25 cents per gallon (2024)

JUANA SUMMERS, HOST:

Filling your gas tank can still be a painful experience, but drivers are starting to see some relief. The average price of gasoline has fallen by nearly $0.25 a gallon after hitting a record-high last month. NPR's Scott Horsley joins us now. Hey, Scott.

SCOTT HORSLEY, BYLINE: Hi, Juana.

SUMMERS: So, Scott, nobody would call gasoline a bargain today, but the price has come down a bit. What's going on?

HORSLEY: Yeah. AAA says the average price nationwide has dropped to about $4.78 a gallon. That's down from a peak just over $5 in the middle of last month. Gas prices are still pretty high by historical standards, though. And as a result, some people are driving less. They're combining errands. They're adjusting plans for summer road trips. Martha Walker is a teacher in Charleston, W.Va. She and a friend had been looking forward to a lengthy driving vacation down South this summer, but they redrew those plans because of the high price of gasoline.

MARTHA WALKER: I was going to go on a trip down the Mississippi River and through some Gulf states and back up the Natchez Trace. And we ended up going just to Saint Louis and coming back rather than doing the big, long loop.

HORSLEY: What's more, instead of driving to the beach this summer, Walker is planning to just visit some nearby state parks. And, you know, a lot of people are making similar changes. As a result, government data shows demand for gasoline is lower than it would ordinarily be this time of year.

SUMMERS: Is that decreasing demand why the price has come down from last month's record high?

HORSLEY: That's part of the story. We're also seeing increased supply. You need crude oil, of course, to make gasoline, and oil companies have been slowly ramping up production here in the U.S. They're pumping more oil now than at any time since the early months of the pandemic - about a million barrels a day more oil than they were a year ago. And John Kilduff, who's an energy analyst at Again Capital, says he expects that domestic oil production to keep increasing through the end of this year.

JOHN KILDUFF: So you're going to see these numbers here tick up even more. It's a terrific operating environment for exploration and producing companies. And they're going to pump. They're going to put wells in the ground, and they're going to take oil out of the ground and sell it because it's just too lucrative not to.

HORSLEY: And in addition to that increased U.S. oil output, OPEC members have been slowly boosting their production. And Kilduff says it's become increasingly clear that Russia's oil output is not going away. China and India continue to buy Russian oil. So global oil supply is up. Global demand for gasoline is down. That's a recipe for falling oil prices. The U.S. benchmark for crude oil has dropped below $100 a barrel.

SUMMERS: So, Scott, what does this all mean for drivers who need to fill up their tanks?

HORSLEY: Well, gasoline prices could have more room to fall. And remember, this is thanks to market forces, not, say, that cut in gas taxes that President Biden proposed. You might think the White House would be trumpeting this drop in gasoline prices. Instead, the administration's been urging refiners and retailers to cut prices further. Now, analysts do say if crude oil prices stay where they are right now, retail gasoline prices could drop by another $0.30 to $0.50 a gallon. That would be welcome news for people like Traci Eyre. She spent much of the last two years working from home, but now she's back in the office at a Kansas City law firm several days a week. And that 50-mile round-trip commute is still pretty costly.

TRACI EYRE: It's still pretty expensive. I'm trying not to do as much driving as maybe I was doing before. You know, it's - during the pandemic, my husband and I would just get in the car and just go for a drive just to get out of the house. We don't do that as much anymore just because, you know, that seems like a luxury expense now.

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HORSLEY: Now, along with gasoline, the price of some other commodities has also started to drop, including building materials, corn, wheat. In many cases, these price cuts reflect fear that the global economy is headed for a recession, and certainly nobody wants to see that. But it could also spell some relief from our very high inflation.

SUMMERS: NPR's Scott Horsley, thank you.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.

Gas prices drop by almost 25 cents per gallon (2024)

FAQs

Why have gas prices suddenly dropped? ›

Gas prices are falling because demand for fuel has weakened and oil prices have tapered off, energy experts said, an unusual set of circ*mstances for the summer season when fuel demands generally peak as more Americans go on road trips for vacation.

What break down the price of a gallon of gas? ›

Crude oil is the biggest piece of the pie making up about 57% of the price of a gallon of gas as of 2022. Then comes refining and profits at 17.7%, followed by distribution and marketing at 12.4%, then federal and state taxes at 12.8%.

Is gas cheaper in Canada or the USA? ›

Gas prices at the pump are typically lower in the US because of the difference in taxes.

Why did gas prices go up 60 cents? ›

LOS ANGELES (KABC) -- California gas prices are rising due to an annual tax increase that took effect Monday. The state's gas tax is going up by two cents, increasing to 60 cents per gallon.

How much will gas be in 5 years? ›

Gas price prediction 2025

The Gas price prediction for 2025 is currently between $ 2.54 on the lower end and $ 4.71 on the high end. Compared to today's price, Gas could gain 30.85% by 2025 if GAS reaches the upper price target.

What is the highest gas price ever? ›

In the wake of Russia's invasion of Ukraine, the national average hit a record high of $5.02 a gallon last June.

Where is gas cheapest in US? ›

September 2023 Gasoline Price Updates
  • Mississippi has the cheapest gasoline prices in the U.S., where the average cost is $3.29 per gallon. ...
  • Louisiana has the second-cheapest gas, with the average cost hitting $3.36 per gallon.
  • Coming in third place is Texas, with gas prices at $3.38 per gallon.
Sep 11, 2023

Is gas cheaper in Mexico or the USA? ›

According to data from PEMEX and other consulting firms, the average price of Magna gasoline in Mexico during 2023 was MX$22.08/L (US$1.30/L), which is 120.8% above the promised amount set by President López Obrador.

Is gas cheaper in Germany or USA? ›

Gas, or petrol, prices around the globe highlight how consumers in dozens of countries — particularly in Europe — pay far more than Americans currently are to fill up their cars. Several European countries pay north of $7 or $8 per gallon, including Germany, France, Italy, Spain and the United Kingdom.

Why is gas over $5 a gallon in California? ›

Several factors go into what drivers pay for gas, including refining costs, taxes, distribution and marketing, and crude oil prices, according to the U.S. Energy Information Administration. High taxes are partly to blame in California. The state has the highest gasoline taxes in the nation, according to EIA.

How much is the California gas tax? ›

California's gas tax officially goes up on Monday. Now, the state's gas tax is 60 cents, whereas it was 58 cents from July 2023 to June 2024, according to the California Department of Tax and Fee Administration. This fee is on top of sales tax and the federal fuel tax for gasoline, which currently sits at 18 cents.

Where are oil prices headed? ›

Although we forecast prices to average near $80/b over the next two years, our price forecast remains uncertain. We generally expect the Brent crude oil price is more likely to decline than rise because we expect global oil production will more likely exceed our forecast than fall short of our forecast.

Why has the oil price dropped? ›

NEW YORK, May 30 (Reuters) - Oil prices fell for the second consecutive session on Thursday, after the U.S. government reported weak fuel demand in the country and a surprise jump in gasoline and distillate fuel stockpiles.

Who controls gas prices in the USA? ›

Petroleum prices are determined by market forces of supply and demand, not individual companies, and the price of crude oil is the primary determinant of the price we pay at the pump.

Why is there a gas shortage in 2024? ›

EIA projected dry gas production will ease from a record 103.79 billion cubic feet per day (bcfd) in 2023 to 102.99 bcfd in 2024 as several producers reduce drilling activities after gas prices fell to a 3-1/2-year low in February and March.

Will prices go back down? ›

"Deflation, economists... they would not really look kindly on falling prices, and actually, prices are far unlikely to go back to those pre-pandemic levels," Foster said. So, while inflation has indeed slowed since 2021, we're probably not going back to 2019 prices.

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