2022 has been a wild ride regarding gasoline prices, seeing some record highs before finally starting to see a decrease in prices. This comes from drivers cutting back on the amount they spend at the pump, causing companies to drop their prices so people can afford to purchase gas.
While gas has always been a fickle commodity, it has never seen prices as high as the past few months. With an average high of $5.01 per gallon of gas in June, it has gone all the way back down to around $4.45 per gallon. In some parts of the country, gas has already come all the way down below $4.
The Gas and Oil Price Index Decreased in July
In July, the gas and oil Price Index, used for the cost of living index, dropped by 7.7%, bringing gas prices lower and lower. While this is helpful, it merely offsets other increases such as housing costs, grocery bills, and electric index, all of which outweigh the drop in gas prices over the last couple of weeks.
Gas Prices are Subject to Worldwide Demand
While many USA citizens believe that drilling for more oil in the US would decrease gas prices here, it actually does not make a difference. That is because gas and oil are global commodities, meaning they are subject to however the rest of the world’s markets sway, which makes oil a highly volatile commodity.
Since gas and oil prices depend on the rest of the world, everything from elections, wars, pandemics, shortages, and more can affect their prices. The most recent reason for the high gas prices is the war in Ukraine. This led to an increase in global gas prices, which also raised the prices in the United States.
States With the Highest Gas Prices Currently
Listed below are the top 10 states with the highest gas prices currently. These are the prices for regular gas, not premium, diesel, or mid-grade.
- Hawaii: $5.373
- California: $5.372
- Nevada: $4.947
- Alaska: $4.939
- Oregon: $4.879
- Washington: $4.810
- Idaho: $4.706
- Utah: $4.632
- New York: $4.356
- Vermont: $4.333
States With the Lowest Gas Prices Currently
Listed below are the top 10 states with the lowest gas prices currently. These are the prices for regular gas, not premium, diesel, or mid-grade.
- Missouri: $3.557
- Alabama: $3.556
- Kansas: $3.552
- Mississippi: $3.541
- Oklahoma: $3.528
- Georgia: $3.527
- South Carolina: $3.519
- Tennessee: $3.517
- Arkansas: $3.491
- Texas: $3.472
Potential Gas Trends for the Rest of 2022
While gas prices have begun to drop, experts do not believe they will continue to drop as they have been and will actually rise back up as the summer continues and into fall. This is because of several reasons, primarily the Ukraine-Russia war and increased demand. Neither of these will likely change soon, so gas prices will continue fluctuating at record highs.
While it is unknown when the Ukraine-Russia war will end, increased demand will begin to slow down as summer comes to an end. This is because more people go on vacation during the summer, which drives up the demand for gas and causes gas prices to increase. However, even with decreased demand come late fall and winter-time, it is unknown if gas prices will stay low.
Fears of Recession Are Beginning to Help Drive Down Prices
Another major aspect of why gas prices are beginning to lower in price is because of fears that the USA is heading towards a recession. As people become more fearful about a recession, they are less likely to drive around for fun, and the lower the demand for gas will be. The lower the demand for gas, the lower the price will become, but this could lead to issues as the economy suffers from wildly fluctuating gas prices.
The Biden Administration Helps Lower Oil Prices
Another thing helping to lower gas prices recently is the Biden Administration releasing oil from the Strategic Petroleum Reserve. This has helped introduce more oil into the American Economy and the global market, helping drive gas prices down. It will not help in the long run, but as a short-term effort, it may make the difference till things stabilize.