Gas Prices Falling Rapidly

The U.S. average is under $4 for the first time in months.

Photo by SLT

Via memeorandum I see that something called OilPrices.com reports “U.S. Gasoline Prices Drop Below $4 For The First Time Since March.”

The average U.S. gasoline price dropped on Tuesday to below $4 per gallon for the first time since early March this year, as supply has risen and concerns about the economy have grown, data from fuel-savings app GasBuddy showed today.

The national average is now back down to $3.99 per gallon for the first time since early March. Gasoline prices have been declining over the past few weeks, and the national average is now $1 a gallon cheaper than it was at its peak at $5.03 on June 14, GasBuddy noted. Falling international crude oil prices have been the main reason for the lower gasoline prices over the past weeks.

Anecdotally, I’m seeing the biggest spread in gas prices that I ever have since I started caring about such things—roughly 40 years now. Looking at my own GasBuddy app, I’m seeing prices for Regular ranging from $3.77 to $4.59 within a five-mile radius. And it was much more spread than that a week ago. There’s a Speedway station just before I get on I-95 on my morning commute that dropped from a high of $5.29 or so down to $3.35 or so almost overnight—and there were other stations that I would routinely pass that were nearly two dollars higher. Indeed, prices are so weird right now that the closest Costco—at which there’s always an insane line unless it’s very early in the morning—is $3.77–a level matched by maybe a dozen nearby stations.

Americans today will spend nearly $400 million less on gasoline than they did in mid-June, according to GasBuddy’s estimates.

Before oil prices started to drop in the latter half of June—due to fears of recession, concerns about oil demand, and snap Chinese lockdowns—gasoline prices in some areas in California were approaching the $7 a gallon mark, GasBuddy said.

It’s just insane that California prices are that much higher. I understand that they require a more environmentally-friendly formulation and have higher taxes but that’s a huge difference on an everyday commodity.

But since mid-June, the national average prices have dropped for 55 consecutive days until reaching $3.99 per gallon on Tuesday.

“We’ve never seen anything like 2022 at the pump, highlighted by once-in-a-lifetime events including the ongoing Covid-19 pandemic, which caused myriad imbalances, exacerbated by Russia’s war on Ukraine. As a result, we’ve seen gas prices behave in ways never witnessed before, jumping from $3 to $5 and now back to $3.99,” said Patrick De Haan, head of petroleum analysis for GasBuddy.

“While the recent drop in gas prices has been most welcomed, the issues that led to skyrocketing prices aren’t completely put to bed, and still could lead prices to eventually climb back up, should something unexpected develop,” De Haan added.

Yup.

High gasoline prices have been a nightmare for the Biden Administration this summer. President Joe Biden is taking the credit for falling gasoline prices, saying last week in his most recent tweet on the matter that “Right now, a family in America with two cars is saving $100 a month on gas compared to peak prices. That’s breathing room. And we’re not letting up any time soon.” 

It’s rather comical that Biden, who spent months more-or-less rightly telling us that the higher prices weren’t his fault, is now taking credit for the fall to prices that, had they not skyrocketed, people would be blaming him for. But that’s politics.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Daryl and his brother Darryl says:

    It’s rather comical that Biden, who spent months more-or-less rightly telling us that the higher prices weren’t his fault, is now taking credit for the fall to prices that, had they not skyrocketed, people would be blaming him for. But that’s politics.

    I agree 100%. But if Republicans are going to beat him to death for price increases that he has little control over then he should by all rights take credit for price reductions that he has little control over.

    More importantly, inflation dropped to 8.5% from a peak of 9.1%, mostly on the drop in energy costs.

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  2. Jen says:

    I agree 100%. But if Republicans are going to beat him to death for price increases that he has little control over then he should by all rights take credit for price reductions that he has little control over.

    Agree with you both. Biden wasn’t to blame for the rise in prices, but received the brunt of criticism anyway. If you’re going to get the blame for the increase, absolutely you should take credit for the decrease–even if neither one are within your power to do anything about.

    Those “I did that” stickers were stupid in the first place, and now look absolutely ridiculous.

    And, James, I’ve been seeing the same weird volatility in prices here in NH. Some stations are below $4/gallon, others are still listing regular unleaded at $4.29 or higher. So strange.

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  3. Scott says:

    There usually is a wider disparity in prices when they are moving rapidly up or down. Depends on the volume of the station. Right now in San Antonio, the range is 3.14 (Costco) to 3.65 (my little stop and rob in my neighborhood).

  4. @Jen:

    And, James, I’ve been seeing the same weird volatility in prices here in NH

    Same here. At one point the local WalMart was cheaper than CostCo–and that never happened before.

  5. Jc says:

    @Daryl and his brother Darryl: It’s nuts to me the market reaction to 8.5% inflation number, driven, like you said, primarily by lower energy costs. Inflation is still high and sticky, yet all these algorithms and computers are like, let’s go! Woohoo! I give up trying to make sense of anything nowadays.

  6. Jay L Gischer says:

    Prices where I am in CA never got to $7, but they were well over 6. Now it’s like $5.35 or so.

    Yes, it’s weird that prices are higher. Part of it is everything is higher, but another part of it is that its a long way from anywhere else, so it’s hard for someone to come in and compete. It’s not that easy to move in gasoline from Texas, for instance.

    So the refiners are all located here, and throttle production to produce the highest profits for themselves. It’s not a monopoly, per se, just limited competition that sees little reason to rock the boat.

  7. Jc says:

    Location, location. With rapid falling prices who knows what each location paid and when and for what. When price gets less volatile station by station will even out back to what you are used to seeing.

  8. JKB says:

    Relax, prices will go up again around October as refiners have to let summer formulation stocks deplete before they can start producing the government-mandated winter mixes. Not likely as much as we’ve seen, but it will shift the narrative.

    Or is this in response to Biden’s threats to convenience store owners if they didn’t cut those prices. An example of “socialism of the German pattern, the Zwangswirtschaft [compulsory economy] of the Nazis” increasing as has been the case since the New Deal, just now on the retail level.

    When in reality it is that they dumped money into the economy. People flush with cash, from that and the lower spending during the pandemic, rushed to make purchases, driving up inflation since the money supply outstripped the lower production. But after the flurry, that extra cash in the hands of consumers is drying up as savings are spent down, just like in the inflationary spending of the late 1960s settled into the recession of the 1970s. But on the flipside, where the mass of Baby Boomers aren’t entering the labor force, but starting to leave en masse as they age out.

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  9. Tony W says:

    I, for one, appreciate California’s higher prices. It keeps the already bad traffic here down somewhat, and encourages alternatives such as solar-powered electric, scooters, bicycles/e-bikes, walking, etc.

    We have a gorgeous weather environment in So Cal, we might as well take advantage of that and be outside getting some exercise instead of filling the world with smog while we maneuver our mobile Lazy-Boy recliners through gridlock traffic.

  10. Tony W says:

    @JKB: Stay in school, folks.

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  11. JohnSF says:

    UK petrol prices also receding somewhat; having peaked at £2 per litre in some places, roughly $9.25 per gallon, is now at £1.74/L = $8.11/gal at my local supermarket.
    Expected to drop to around £1.62/L = $7.50/gal.

    No such luck with natural gas though.
    Current forward trading still around 500p/therm; roughly ten times the level it was a year ago.
    Quite probable to spike higher still when Putin cuts the gas supply to Europe in midwinter.
    Which is a stone certainty he’ll do.

  12. Just nutha ignint cracker says:

    @Jay L Gischer: Indeed. The West Coast is a distinct market compared to the rest of the nation. All the gas here is refined in the area. There’s a refinery in Anacortes, Washington and others in Cali. They produce nearly all of the consumption, so prices elsewhere have little effect.

  13. senyordave says:

    Regarding inflation. I agree with a take I heard this morning. Month over month (this is the key measure) for May and June was 1.0% and 1.3%, respectively. That was as bad as it gets. With two consecutive months like that it was apparent that many companies had used the inflation panic as an opportunity to raise prices. This analyst believes that CPI will head to a 5-6% run rate, largely because of wage inflation, plus companies will continue to raise prices to grow earnings. We still see that people will continue to spend, they have just stopped saving (personal savings are way, way down). Th economy is still hot enough to drive inflation at 6%, and for the middle class and below that is a problem. I think wages will still lag inflation.

  14. EddieInCA says:

    @Jay L Gischer:

    Prices where I am in CA never got to $7, but they were well over 6. Now it’s like $5.35 or so.

    .

    I paid $7.69 at one point for several fill ups. Unfortunately I could never fill up because the pumps automatically stop at $125 and with a 22 gallon gas tank, it got barely past 3/4 tank each time.

    Yesterday, I paid $5.19 for 91, which I need for my car.

  15. Liberal Capitalist says:

    Denver at most places still seem to be a $ 4.50

    But Costco was at $3.66 today.

    So that means some local profiteering is going on, with stations resisting to drop prices if the suckers customer continues to be willing to pay.

  16. Michael Reynolds says:

    @JKB:

    An example of “socialism of the German pattern, the Zwangswirtschaft [compulsory economy] of the Nazis” increasing as has been the case since the New Deal, just now on the retail level.

    Can I get some blue cheese dressing to go with that word salad?

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  17. EddieInCA says:

    @Michael Reynolds:

    What’s wrong with American cheese, you commie? Why does it have to be BLUE cheese? American cheese isn’t good enough. You have to make cheese partisan.

    Commie. Marxist. Satan-worshipping scum!!!

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