Gas prices rose sharply at the beginning of 2024, putting additional pressure on household budgets and complicating the fight against inflation. Since January, the national average cost for a gallon of regular unleaded gasoline has increased by nearly 10%, translating to $0.30 per gallon. Typically, prices rise in spring and summer due to increased travel demand and refineries’ shift to a costlier summer fuel blend. This is a regular occurrence and not a cause for alarm. So, are the gas prices going down now?
Are Gas Prices Going Down? – Mid-2024 Gas Price Trends in the United States
In the United States, as we reach the middle of 2024, there has been a noticeable yet modest rise in gas prices from the start of the year. The average price began at approximately $3.20 per gallon in January. It climbed to a high of $3.79 in April before moderating to about $3.52 by late July, marking an overall increase of almost $0.32 over these months. Current gas prices are considerably lower compared to the significantly higher peak of over $5 per gallon in mid-2022. Despite recent increases, they have not reached the extreme highs of previous years.
At gas stations, you’ll find four different types of fuel, each priced differently. Regular, midgrade, and premium gasoline are classified based on their octane ratings, which reflect the fuel’s stability and the pressure at which it ignites in the engine.
Regular gasoline is the most affordable, while midgrade or super is priced between regular and expensive options. Premium or super premium gasoline is the costliest among the non-diesel options. Various costs and profit margins influence the pricing at your local station.
Here’s a table representing the national average gas prices for different fuel types as of late July:
| Fuel Type | National Average Price |
| Regular | $3.521 |
| Mid-Grade | $3.975 |
| Premium | $4.324 |
| Diesel | $3.831 |
| E85 | $2.959 |
Looking ahead, gas prices are expected to hold steady through the summer months. This anticipated stability aligns with typical seasonal trends, where gas prices often rise in early summer due to higher demand and then level off as the season progresses.
Why Are Gas Prices Rising?
The rise in gas prices can be attributed to several routine and extraordinary factors. Regular refinery maintenance, the annual shift to a more expensive summer blend of gasoline, and an uptick in demand are standard drivers of price increases. Refineries typically schedule maintenance during the milder spring and fall conditions to avoid the operational challenges posed by extreme weather, which is critical for safely handling petrochemicals.
Geopolitical tensions also play a significant role in fluctuating fuel prices. Recent conflicts, such as the escalated tensions between Israel and Hamas, have pushed oil prices to six-month highs. Similarly, incidents involving Iran, including a missile and drone attack that Israel largely intercepted, have heightened market anxieties about potential disruptions in oil supply, influencing global oil prices.
In response to these incidents, crude oil prices have risen, directly impacting gasoline prices, as crude oil constitutes about 60% of the cost of gasoline. With Brent crude oil prices remaining above $87 a barrel, this places upward pressure on gas prices across various states in the US.
Additionally, geopolitical advisories, like the US urging Ukraine to refrain from targeting Russian oil infrastructure, aim to stabilize the global energy market and reflect the interconnected nature of global events and fuel pricing.
As a result, gas prices have surged in several states, with California experiencing averages around $5.46 per gallon and at least six other states seeing prices at or above $4 per gallon. In contrast, states like Colorado, Arkansas, Mississippi, and Louisiana are seeing some of the lowest prices, averaging under $3.20 per gallon.
Additional Reasons Include
- Driver Demand:
The expected increase in gasoline demand this summer has not materialized. Most of the year, gasoline consumption has been lower than in 2023, with economic uncertainty likely contributing to subdued demand in the coming months.
Gas prices usually begin to rise in spring as warmer weather encourages travel during March and April. Following this, prices typically escalate from Memorial Day weekend through July. However, this year, prices have declined since the holiday weekend. This raises the question of whether the usual increase in summer driving will continue to be a trend.
- Summer-blend Gasoline:
Refineries transition from producing winter-blend to summer-blend gasoline during spring, which costs more. This type of gasoline is designed to reduce emissions in warmer weather when gasoline evaporation is more likely.
Factors Influencing Gas Prices
Gas prices are not controlled by any single person but are influenced by a series of complex factors, as outlined by the U.S. Department of Energy:
- Crude Oil Costs:
The primary determinant of gasoline’s retail price is the cost of crude oil, which is the most crucial factor impacting gasoline prices. Crude oil prices vary based on global supply and demand, which can be affected by world economic conditions, geopolitical events, and oil production levels from leading oil-producing countries and companies.
- Refining Costs:
Refineries incur significant costs when converting crude oil into gasoline, diesel, and other petroleum products. These costs can vary based on the time of year—for instance, producing summer-blend gasoline is typically more expensive than other blends. Costs also differ across regions in the US due to varying environmental regulations that mandate specific gasoline formulations to minimize air pollution.
Additionally, higher gasoline demand during summer often leads to increased refining costs and, subsequently, higher prices at the pump. The inclusion of additives like ethanol can also affect gasoline prices.
- Taxes and Gasoline Pricing:
Taxes from federal, state, and local governments are significant components of the retail price of gasoline. The federal excise tax on gasoline is 18.40 cents per gallon. State taxes vary widely, with Alaska charging about $0.15 per gallon and California as much as $0.68 per gallon. State taxes average approximately $0.39 per gallon, and together with federal taxes, the combined average is around $0.57 per gallon at the pump. Additionally, sales taxes and local municipality taxes can further increase gasoline prices in some areas.
- Distribution and Marketing Costs:
The price of gasoline also includes the costs of distribution and marketing. These include the expenses of transporting gasoline via pipelines, ships, trucks, and trains from refineries to terminals. From there, tanker trucks deliver the gas to stations. Marketing costs arise from efforts by refineries, distributors, wholesalers, and retailers to promote gasoline sales.
- Market Dynamics and Other Factors:
Consumer demand plays a key role, typically increasing in the summer. Overall, economic conditions also affect gas prices. Additionally, issues within the supply chain, such as problems at refineries or geopolitical tensions, can lead to sudden increases in local or national gas prices.
State-Wise Gas Prices as of July 2024 Across the US
Here is an overview of average gas prices across various states in the US as of 25 July 2024:
| State | Regular | Mid-Grade | Premium | Diesel |
| Alaska | $3.812 | $4.040 | $4.252 | $3.791 |
| Alabama | $3.152 | $3.567 | $3.951 | $3.643 |
| Arkansas | $3.126 | $3.527 | $3.913 | $3.498 |
| Arizona | $3.473 | $3.790 | $4.089 | $3.757 |
| California | $4.648 | $4.876 | $5.046 | $5.046 |
| Colorado | $3.363 | $3.757 | $4.071 | $3.528 |
| Connecticut | $3.572 | $4.150 | $4.513 | $4.008 |
| District of Columbia | $3.710 | $4.290 | $4.646 | $4.233 |
| Delaware | $3.409 | $3.926 | $4.214 | $3.765 |
| Florida | $3.452 | $3.878 | $4.200 | $3.825 |
| Georgia | $3.358 | $3.800 | $4.189 | $3.815 |
| Hawaii | $4.682 | $4.910 | $5.146 | $5.468 |
| Iowa | $3.283 | $3.558 | $4.029 | $3.521 |
| Idaho | $3.579 | $3.833 | $4.098 | $3.729 |
| Illinois | $4.068 | $4.608 | $5.056 | $3.903 |
| Indiana | $3.681 | $4.203 | $4.692 | $3.917 |
| Kansas | $3.165 | $3.496 | $3.802 | $3.481 |
| Kentucky | $3.341 | $3.854 | $4.271 | $3.604 |
| Louisiana | $3.073 | $3.489 | $3.857 | $3.517 |
| Massachusetts | $3.490 | $4.048 | $4.417 | $4.058 |
| Maryland | $3.503 | $4.054 | $4.361 | $3.880 |
| Maine | $3.490 | $3.998 | $4.448 | $4.045 |
| Michigan | $3.802 | $4.298 | $4.841 | $3.921 |
| Minnesota | $3.305 | $3.695 | $4.102 | $3.624 |
| Missouri | $3.202 | $3.551 | $3.859 | $3.456 |
| Mississippi | $2.988 | $3.394 | $3.758 | $3.491 |
| Montana | $3.546 | $3.852 | $4.166 | $3.894 |
| North Carolina | $3.326 | $3.753 | $4.133 | $3.786 |
| North Dakota | $3.385 | $3.705 | $4.008 | $3.650 |
| Nebraska | $3.283 | $3.497 | $3.947 | $3.490 |
| New Hampshire | $3.417 | $3.929 | $4.363 | $4.028 |
| New Jersey | $3.413 | $3.970 | $4.235 | $3.770 |
| New Mexico | $3.224 | $3.608 | $3.897 | $3.612 |
| Nevada | $3.916 | $4.179 | $4.405 | $3.848 |
| New York | $3.614 | $4.124 | $4.508 | $4.240 |
| Ohio | $3.598 | $4.094 | $4.596 | $3.845 |
| Oklahoma | $3.131 | $3.495 | $3.750 | $3.358 |
| Oregon | $3.947 | $4.168 | $4.404 | $4.062 |
| Pennsylvania | $3.636 | $4.067 | $4.412 | $4.245 |
| Rhode Island | $3.446 | $4.078 | $4.427 | $4.101 |
| South Carolina | $3.217 | $3.646 | $4.006 | $3.621 |
| South Dakota | $3.255 | $3.458 | $3.883 | $3.467 |
| Tennessee | $3.092 | $3.507 | $3.876 | $3.596 |
| Texas | $3.134 | $3.564 | $3.909 | $3.397 |
| Utah | $3.573 | $3.821 | $4.029 | $3.607 |
| Virginia | $3.415 | $3.868 | $4.232 | $3.812 |
| Vermont | $3.459 | $4.015 | $4.419 | $3.909 |
| Washington | $4.249 | $4.512 | $4.727 | $4.530 |
| Wisconsin | $3.521 | $3.984 | $4.433 | $3.572 |
| West Virginia | $3.440 | $3.846 | $4.283 | $3.858 |
| Wyoming | $3.330 | $3.598 | $3.877 | $3.651 |
Which State Has the Highest Regular Gas Prices?
As of July 2024, the state-wise gas prices across the US vary significantly. Here are the five states with the highest regular gas prices:
- Hawaii: $4.682
- California: $4.648
- Washington: $4.249
- Illinois: $4.068
- Nevada: $3.916
Which State Has the Lowest Regular Gas Prices?
The five states with the lowest regular gas prices are:
- Mississippi: $2.988
- Louisiana: $3.073
- Arkansas: $3.126
- Oklahoma: $3.131
- Texas: $3.134
Will Gas Prices Go Down in 2024 and 2025?
According to the U.S. Energy Information Administration, gas prices will decline in 2024 and 2025. Experts anticipate a reduction of at least 15 cents per gallon annually, with the average price falling from $3.51 per gallon in 2023 to $3.38 in 2024.
Several factors might influence this decrease in gas prices:
- Increased oil production in the U.S.
- Larger oil inventories
- Improvements in global refining
- Counteracting OPEC+’s production cuts
- A warmer winter
- Enhanced supplies
- Lower demand for fuel during economic slumps can reduce prices.
- Policies favoring domestic drilling under a Republican administration may decrease prices.
- A rise in the adoption of electric vehicles reduces the demand for gas, potentially boosting supply.
Conclusion
Gas prices have increased noticeably since the beginning of 2024, primarily driven by seasonal demand, refinery changes, and geopolitical tensions. Despite these increases, current prices remain lower than the peaks experienced in 2022. While regional variations are significant, with states like California and Hawaii experiencing higher prices, others like Mississippi and Louisiana enjoy lower rates.
Experts predict a modest decline in gas prices through the remainder of 2024 and into 2025. Factors such as increased domestic oil production, improved refining capacities, and reduced fuel demand are expected to contribute to this decrease. While price fluctuations are inevitable due to global and local economic factors, the general trend points towards a gradual cost reduction over the coming years.
Frequently Asked Questions
Are gas prices going down?
Yes, gas prices have recently decreased. The national average is around $3.50 per gallon, down from previous months due to lower oil prices, reduced driving post-Memorial Day, and strong supply.
Why are gas prices so high?
High gas prices are due to fluctuating crude oil prices, which are affected by global demand and geopolitical issues. Refining costs, taxes, and distribution expenses also contribute, with summer prices often being higher because of more expensive gasoline blends.
Which states have the highest and lowest gas prices?
As of mid-2024, Washington, California, and Colorado had some of the highest gas prices, while states like Texas, Mississippi, and Arkansas had some of the lowest prices. Differences in state taxes, transportation costs, and gasoline requirements account for these variations.
What is the forecast for gas prices shortly?
Gas prices are expected to stay stable or decrease slightly, with forecasts predicting a national average of about $3.38 per gallon into 2025. This could be due to increased oil production, more extensive inventories, and rising use of electric vehicles, reducing gasoline demand.
