Why are gas prices going down before this 4th of July weekend? Where is it cheaper?
Gas prices are dramatically cheaper going into the Fourth of July weekend than they were a year ago as over 43 million Americans plan to hit the road.
The AAA is forecasting that over 43 million Americans will hit the road over the Fourth of July weekend to enjoy the holiday, up more than 2 million from last year. That’s a record prediction for the federation of motor clubs despite the increased cost most will have to pay this year as they travel.
However, one cost that will be cheaper this year compared to last is how much drivers pay when they fill up at the gas station. In 2022 over the Independence Day weekend the average gallon of regular was $4.80, but this year in the run-up to the holiday the price is almost $1.30 cheaper.
Why are gas prices going down before this 4th of July weekend?
Simply put, cheaper oil has helped the price come down. Crude oil prices, which had been rising from pandemic lows, spiked last year after Russia invaded Ukraine. However, several factors have since eased the price per barrel down from around $120 to under $70 a year later.
Economic malaise in China, fears of a global slowdown and concerns about the fallout from interest rate hikes by the Federal Reserve on the one hand. Last year’s global effort to tap into strategic reserves, led by President Biden, making millions of barrels available to increase supply helped tame prices.
As well, supply hasn’t been as crimped as had been feared as Russia continues to export crude despite Western sanctions. Not even the recent mutiny and march on Moscow by the Wagner mercenary group has spooked markets.
Where is gas cheaper?
According to AAA the cheapest price per gallon of regular on average can be found in Mississippi and neighboring states. The five cheapest being Mississippi, Louisiana, Tennessee, Alabama and Arkansas. Cheaper gasoline can typically be found in the South and throughout the Midwest and Plains, with the outlier being Illinois.
The most expensive gasoline can be found on the West Coast, in Hawaii and in Alaska. Washington State recently overtook the Golden State for the title of highest price per gallon on average statewide. Experts say that is because of new legislation to fight climate change, whose compliance cost is being passed onto consumers by the oil companies.