Gasoline Prices Drop to Lowest Level of the Year Ahead of Thanksgiving, Benefitting Drivers and the Biden Administration
Gasoline prices have hit their lowest point of the year just in time for Thanksgiving, according to data from AAA. The national average price for a gallon of gasoline currently stands at $3.30, marking a $0.25 decrease from a month ago and a $0.36 decrease from last year.
In an encouraging development for the Biden administration, the decline in gas prices comes at a time when the cost of other goods and services has been steadily rising. This will provide some financial relief to Americans as they hit the road to celebrate the holiday season.
The drop in prices has been notable across the country, with twelve states reporting average prices below $3.00 per gallon. Even in California, where prices tend to be higher, the average price has dipped below $5.00, settling at $4.96.
Various factors have contributed to the decline in prices. The switch to a less expensive winter blend, lower seasonal demand, and a squeeze in wholesale margins have all played a role. Additionally, falling oil prices have further driven down gasoline costs.
Despite the positive news, for 40% of drivers, $3 per gallon is still considered a “pain point,” according to AAA. However, if oil prices continue to decrease, experts expect gasoline prices to continue their downward trajectory.
It is worth noting that oil prices account for roughly 50% of what drivers pay at the pump. With the return of summer blend gas and better weather in the future, oil prices traditionally tend to rise as more people embark on travel plans.
The timing of the decline in gasoline prices couldn’t be better, as it coincides with what is anticipated to be the third-busiest Thanksgiving travel period on record. This will undoubtedly be a welcome change for millions of Americans who were worried about the impact of rising gas prices on their holiday plans.
However, some experts caution that the drop in gasoline prices may not necessarily indicate positive financial trends. This is because demand remains lower compared to the same period last year, potentially reflecting ongoing concerns related to the COVID-19 pandemic.
Looking ahead, the future trajectory of gasoline prices will depend heavily on the movement of oil prices. As the year progresses and summer approaches, there is a possibility that prices could climb again. For now, though, drivers can bask in the relief of lower gasoline costs as they hit the road for Thanksgiving.
