Gas Prices Drop Steadily Ahead of Peak Holiday Driving — Here’s Why
If Santa Claus didn’t have to hop across oceans to deliver his toys, he might find it cheaper to park his sleigh this Christmas and drive a car instead. Gas prices continue to move lower ahead of the peak holiday driving season, having fallen by 13 cents a gallon over the last week alone.
The average U.S. price for a gallon of gas was $3.178 as of Dec. 16, 2022, according to AAA. That’s down from $3.315 a week ago and $3.743 a month ago. The current price is also well below last year’s average of $3.316 a gallon, continuing a pattern of lower year-over-year prices that began last week.
Average prices have fallen by a whopping 37% since setting an all-time high of $5.016 a gallon on June 14, 2022.
The states with the largest price declines over the past week include Montana (a drop of 23 cents a gallon), Nevada (20 cents), Vermont (19 cents), Indiana (19 cents), Connecticut (18 cents), Michigan (18 cents), California (18 cents), Oregon (17 cents), Washington (17 cents) and Ohio (17 cents).
In report published Thursday, AAA said demand for gasoline has decreased slightly over the past week — a typical trend during the winter, when there is less daylight and the roads become icier. This partly explains why prices at the pump continue to fall. Another factor is a “significant” rise in gasoline stocks, contributing to a favorable supply/demand equation for consumers.
“As demand remains low and stocks grow, drivers will likely continue to see pump prices decrease through next week,” AAA noted.
In its most recent short-term energy outlook, published on Dec. 6, the U.S. Energy Information Administration projected that the average gasoline retail price for 2023 will be $3.51 a gallon. That’s down from an average of $3.99 in 2022, but still well above the averages in 2021 ($3.02) and 2020 ($2.18).
More From GOBankingRates
- 6 Ways To Tell If You're Middle Class or Upper Middle Class
- If You Find a Rare 'Doubled Die' Penny, It Could Be Worth $1.14 Million
- 3 Ways to Recession Proof Your Retirement
- Here's How To Build a 6-Month Emergency Fund
