Compared with the same week in 2024, the national average is down more than 18 cents, and it has slipped 21 cents since late November. AAA notes that this trend positions December as the least costly month for gasoline since 2020, when pandemic-related restrictions curtailed demand and disrupted economic activity.
The recent decline is largely tied to steady supplies and subdued crude oil costs. West Texas Intermediate crude, the U.S. benchmark, traded below $60 a barrel for most of December, helping refiners keep wholesale gasoline prices contained. Ample inventories and consistent refinery output have also limited upward pressure at the retail level.
The easing at service stations offers some relief to consumers grappling with elevated prices elsewhere. Grocery bills, household staples and year-end gift purchases all remain cost concerns amid ongoing inflation and tariffs imposed on imported goods. Although the U.S. Bureau of Labor Statistics reported that consumer prices in November rose 2.7% from a year earlier—slower than in previous months—the pace still exceeds the Federal Reserve’s 2% target. Economists have cautioned that November’s data may have been distorted by reporting delays linked to the 43-day federal government shutdown earlier in the year.
Persistent cost pressures appear to be influencing sentiment. The Conference Board’s latest survey showed that its consumer confidence index fell in December to the weakest reading since April, signaling that many households remain uneasy about the broader economic outlook and their personal finances.
While fuel costs have fallen, they continue to vary based on several familiar factors. States such as California and Hawaii pay higher averages largely due to stricter environmental regulations, higher taxes and logistical challenges associated with transporting fuel over longer distances or to islands. Conversely, states situated near major refineries or pipeline hubs, including Oklahoma and Arkansas, often benefit from shorter supply chains and lower tax burdens, resulting in cheaper retail prices.
Seasonal trends are also at play. Winter-grade gasoline, which is less expensive to produce than the summer formulation required under federal emissions standards, typically brings down prices in colder months. In addition, travel patterns can influence demand: AAA projects that more than 100 million Americans will drive to holiday destinations this year, but the volume of trips is distributed over several days, helping avert the kind of sharp demand spikes that can lift retail prices.
Future movements at the pump will depend largely on crude oil markets, refinery operations and any geopolitical developments that could disrupt supply. According to the U.S. Energy Information Administration, global oil inventories are currently adequate, and production in key regions remains stable, factors that may keep a lid on wholesale costs in the near term.
Still, market watchers caution that the energy landscape can shift quickly. Unexpected refinery outages, extreme weather or shifts in global production agreements could affect supply and pricing. For now, however, most travelers heading out for Christmas and New Year celebrations are expected to face comparatively moderate fuel bills.
Crédito da imagem: ABC via AP
