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Gas prices are falling at a historic rate. Here's why experts say it will continue

gas prices
Posted at 11:18 AM, Aug 31, 2022

If you have gone to the pump recently, perhaps you have noticed the sticker price of gas dropping each day. Across the country, the average price for a gallon of gas has fallen for 76 straight days, the second-longest streak on record dating back to 2005.

It was less than three months ago when the average price of a gallon of gas nationally was $5.02, the highest number on record. Today, that number is much lower: $3.84, as of August 31. According to AAA, and those who understand the oil industry, it will likely continue to drop.

“Sixty percent of that price is based off what crude oil is going for,” said Skyler McKinley of AAA Colorado. “We have seen crude oil plummet significantly in the past several months and that has been tied to the decrease in gas prices.”

Crude oil is a raw natural resource that is taken from the earth and then refined into usable fuel like gas. Like most commodities, it is traded on the market at various prices that are determined by supply and demand, and currently, demand is not great—meaning its price, much like the price of gas, has been falling.

“Fundamentally, there are jitters about a global recession that has made investments in crude not that wise,” said McKinley. “Of course, we use a lot less oil if we are entering into a recession, and the markets are reacting in kind. Consumption has fallen. Americans have changed their driving behaviors. AAA surveys show up to 65% of drivers have changed their behaviors, not just because of the high price of gas, but because of the high price of just about everything. They’ve decided and planned their lives to use less gas.”

This map from AAA shows the average price for a gallon of gas across every state in the country. In 19 states, most of them in the Northeast and West, gas prices are higher than the national average of $3.84. The cheapest gas you will find in the country is in the South, where a typical gallon will run you just over $3.40, according to AAA.

In a few weeks, the US gas supply will switch over to winter blend fuel as it does every fall. It provides a little less energy, but Americans drive less during the winter. AAA says that will knock off an additional $0.10 or so from what you are paying at the pump.