Will gas prices go below $3? When could it happen?

In ten states, drivers pay less than two dollars a gallon for regular gasoline, and in those with higher prices, many wonder when they could face lower prices at the pump.

The US Energy Information Administration’s (EIA) ‘Short-term energy outlook’ shows that the average gasoline prices are expected to fall by $0.10 from $3.40 to $3.30 between this year and next. This means that while prices could continue to fall, prices will not fall under $3 nationally within the next year.

What variables impact gun prices?

In part, gas prices have been able to come down this year because petroleum production has increased globally. The EIA estimates that in 2024, global production will increase by 0.6 million barrels per day, which has been led by the United States, Canada, Guyana, and Brazil. OPEC+ decreased their production this year to keep prices higher and plans to cut production next year, too. Lower production by OPEC+ means that petroleum producers outside OPEC+ member states must increase supply to avoid an uptick in prices for gasoline and transportation costs more broadly.

Texas produces the most petroleum of any US state, with its total volume representing around 42.5 percent of the country’s total production. In terms of how being such a major producer impacts gas prices, drivers in Texas pay the sixth lowest price for gas.

States with low gasoline taxes tend to have lower gas prices. Mississippi, for example, has the lowest average gas price, at $2.824, according to AAA, and ranks second in the country in terms of the levy placed on gasoline by the state government ($0.18/gallon).