The plunge in gasoline prices hit another milestone on Friday, with the national average sinking to the lowest level since September 2021.
The sharp decline in pump prices is encouraging news for consumers after a year of high prices for groceries, rent and other essentials.
A gallon of regular gas now sells for an average of $3.18, according to AAA. That marks a decline of 14 cents in the past week and 56 cents in the past month.
The last time the national average was cheaper than $3.18 was September 14, 2021, according to AAA.
It’s a remarkable reversal from earlier this year when Russia’s invasion of Ukraine helped catapult gas prices above $5 a gallon for the first time ever.
Nineteen states currently have an average gas price of less than $3 a gallon, including Minnesota, Ohio and Colorado.
In a sign that gas prices could continue to slide, US oil prices dropped another 3% to $73.58 a barrel Friday morning.
Patrick De Haan, head of petroleum analysis at GasBuddy, told CNN on Friday that the national average may drop below the $3 threshold just in time for Christmas Eve. He noted that by GasBuddy’s metrics, the median gas price tumbled to $2.99 as of Friday morning.
The slide in gas prices has been driven by a variety of forces — not all of them positive.
For instance, the same recession fears rocking the stock market have raised concerns in energy markets about weaker demand ahead. De Haan said US gasoline demand has been “quite soft” even for this time of the year, due at least in part to economic uncertainty.
Worries about China’s economy and Covid-19 policies have also weighed on energy markets.
On the positive side, US refineries have ramped up production of gasoline, diesel, jet fuel and other petroleum products. US oil companies have also gradually increased supply.
Energy analysts say the Biden administration’s release of unprecedented amounts of emergency oil from the Strategic Petroleum Reserve earlier this year has also helped depress prices.
Despite widespread fears earlier this year, Russia’s oil exports have not been derailed by the war in Ukraine and sanctions from the West. A European Union embargo on Russian seaborne crude and a price cap, which both went into effect this month, have not so far pushed up the price of oil globally, which many analysts had feared.
“Russian exports have continued to flow. And that’s what the market was panicked about back in March,” De Haan said.