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Less demand fuels national gas price drop to below $4 per gallon

(The Center Square) – The national average price for a gallon of gas fell below $4 on Thursday for the first time since March, according to AAA, in large part because of decreased demand as motorists drive less.

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After hitting an all-time high of $5.02 per gallon in June, the national average price has now fallen just below $4 to $3.99, marking 58 consecutive days of declining gas prices.

According to the U.S. Energy Information Association, however, the gasoline demand is about 3% lower than it was a year ago, indicating that the decrease in gas prices has failed to draw consumers back to the pump after many have shifted driving habits. A survey by AAA reports that almost a third (64%) of U.S. adults have changed their driving habits since March..

The top three changes made were deciding to drive less (88%), combining errands (74%), and reducing shopping or dining out (56%).

At the same time, the total gasoline supply in the U.S. has fallen to 220.3 million barrels from the previous week.

AAA attributes the decline in gas prices, in part, to the decrease in demand as well as a decrease in the price of oil.

“Oil is the primary ingredient in gasoline, so less expensive oil is helpful in taming pump prices,” said Andrew Gross, AAA spokesperson. “Couple that with fewer drivers fueling up, and you have a recipe for gas prices to keep easing.”

Although the average national price for gas has fallen, prices vary state to state, with California’s average price per gallon sitting at $5.34. Many other states, too, have gas prices over $4, including Hawaii, Illinois, Nevada, Oregon, Washington, and New York.

President Joe Biden celebrated the continual decline of gas prices last week and said that he is doing everything he can to keep bringing them down.

“I’m doing everything I can to bring down the cost of gas at the pump,” Biden said. “And today, America hit 50 days straight of falling gas prices – the fastest decline in over a decade.”

Some say, however, that the U.S. should not celebrate yet. Daniel Turner, founder and executive director at Power The Future, a non-profit organization focused on energy research, said that prices are down because the economy is in a recession and that the U.S. needs to expand its domestic supply of oil. 

“While gas prices falling from their all-time high is a good thing, this is no time for the Biden Administration to take a victory lap. Joe Biden’s recession is the reason for the price drop and our families are still paying too much because of his energy failures,” Turner said. “Winter is coming, and the drain from the Strategic Petroleum Reserve will end in October. To meet this rising demand in the long term, we must increase domestic supply, something the Biden Administration is unwilling to do.”

By Richie Malouf | The Center Square

The Georgia Virtue
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