Average U.S. Gas Price to Drop Below $3.00 per Gallon for the First Time Since 2010

WASHINGTON (Oct. 31, 2014) – The national average price of gas tomorrow will drop below $3.00 per gallon for the first time since Dec. 22, 2010, ending its longest streak ever above that price, according to AAA. AAA estimates that lower gas prices are helping consumers save at least $250 million per day on gasoline compared to early summer when the national average reached $3.68 per gallon.

“Consumers are experiencing ‘sticker delight’ as gas prices unexpectedly drop below $3.00 in much of the country,” said Bob Darbelnet, CEO of AAA. “Lower gas prices are a boon to the economy just in time for holiday travel and shopping.”

The national average price of gas has remained more expensive than $3.00 per gallon for 1,409 consecutive days. During that 46-month period, gas prices averaged $3.52 per gallon and reached as high as $3.98 per gallon on May 5, 2011.

More than 60 percent of all U.S. stations are selling gas for less than $3.00 per gallon today. Consumers can find at least one station selling gas for less than $3.00 per gallon in nearly every state. The drop below $3.00 per gallon is significant because about 40 percent of American adults believe that gasoline is “too high” when the price reaches that level, according to a AAA survey conducted in March.

“The steep decline in gas prices has helped to make driving less expensive for the vast majority of Americans who use their car every day,” continued Darbelnet. “Many Americans are spending $10-$20 less to fill up the cars on every trip to the gas station compared to what they paid during the summer driving season.”

AAA anticipates gasoline prices may continue to drop in the near term, but it is possible that prices in many areas will begin to stabilize soon. Unless there are unexpected developments, gasoline should remain relatively inexpensive this winter due to lower demand and typical seasonal trends. By spring, higher gas prices may return due to refinery maintenance, increased demand and a return to summer-blend gasoline.

“Paying less than $3.00 for gas is a welcome holiday gift that may not last nearly as long as many would hope,” continued Darbelnet. “It is possible that lower gas prices will soon be a faded memory, so enjoy it while you can. The days of paying more than $3.00 per gallon for gas have regrettably not gone away.”

Gas prices typically decline in the autumn due to decreased driving and the switchover to winter-blend gasoline, but prices have fallen faster than many expected this year due to sharply lower crude oil prices. The price of West Texas Intermediate crude oil has dropped more than $20 per barrel since late June due to strong production and concerns about the global economy, particularly in Europe and Asia. There also are reports that some OPEC nations, such as Saudi Arabia, would be willing to let prices fall to maintain a competitive market share.

Crude oil is the main cost associated with gasoline and represents about two-thirds of the price of a gallon of gas. It is estimated that every ten dollar per barrel change in the price of crude oil results in a 25-cent change in the price of a gallon of gasoline.

The least expensive prices primarily are in the Southeast and Central United States, which are regions that generally have lower gas taxes and have access to major refineries processing cheaper domestic crude oil. The most expensive prices are generally on the West Coast and in the Northeastern United States, yet even these regions are experiencing lower prices than recent years. Average state prices can be found on AAA’s Daily Fuel Gauge Report.

As North America’s largest motoring and leisure travel organization, AAA provides more than 54 million members with travel, insurance, financial and automotive-related services. Since its founding in 1902, the not-for-profit, fully tax-paying AAA has been a leader and advocate for the safety and security of all travelers. AAA clubs can be visited on the Internet at AAA.com.