Gas prices have been plunging. This Thanksgiving may offer drivers the lowest prices since 2020. However, while many states enjoy a price for a gallon of regular well below $3, in California, the price is close to $5 most days.
How good is the trend for drivers? CNBC reported: “Prices have fallen for nine weeks now and are on the longest downward streak since the summer of 2022, said Patrick de Haan with GasBuddy.” If oil prices continue to decline, the drop will continue.
The carefully followed AAA Fuel Gauge shows the national average for a gallon of regular at $3.295. A month ago, that price was $3.554. A year ago, the price was $3.662. This is the cost of gas the year you were born.
The states with the lowest prices are mostly around the Gulf of Mexico, near the massive refineries south of Houston. Mississippi has the lowest price at $2.743, followed by Texas at $2.752, Oklahoma at $2.791. Alabama has the sixth lowest price at $2.853. These prices are evidence that the cost to move a large amount of gas long distances from refineries gets reflected in costs.
The most important factor in gas prices continues to be the price of oil. After reaching $120 a barrel in June 2022, the price fell most months until another increase this summer when it moved back toward $90. Since then, it has fallen to $78. Worries about geopolitical effects on supply have been overstated. Supply from producers, which includes the US, has been abundant. Demand in China, the world’s largest crude importer, has been modest because of a slow economy. With oil near summer lows, there are some possible stocks.
The other major reason gas prices vary from state to state is taxes. This is the main reason gas prices, based on a gallon of regular, have been so high in California. According to the API, the national average of gas taxes per gallon is $.5709. Southern states have lower taxes. In Mississippi, for example, the price is $.3719 a gallon. In California, the figure is $.8655.
The primary reason California has $5 gas is state taxes.
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