This holiday season, many U.S. drivers are experiencing the benefits of lower gas prices. According to data from motor club AAA, December has emerged as the cheapest month for gasoline prices this year, with the national average for unleaded gasoline remaining below $3 since December 2. Prices reached their lowest point of approximately $2.85 per gallon earlier this week.
Although there has been a slight increase in prices, which hovered around $2.86 per gallon on Tuesday, consumers traveling during the Christmas holiday can still expect relatively mild gasoline prices. Variations in state averages reflect local conditions such as refinery supply and fuel regulations. On Tuesday, Hawaii reported the highest average gas price at about $4.44 per gallon, followed by California at $4.30 and Washington at $3.92. In contrast, Oklahoma boasts the lowest average at roughly $2.30 per gallon, followed closely by Arkansas and Iowa at nearly $2.42 each.
Unlike prices from the previous year, unleaded gasoline is down more than 18 cents compared to this time last year and has decreased by 21 cents since a month ago. AAA notes that the current prices signify the cheapest December for gasoline since 2020, a year marked by economic turmoil due to the COVID-19 pandemic.
The decrease in gasoline prices this month is attributed to a strong supply. Crude oil, the primary component of gasoline, has remained at a stable level, with West Texas Intermediate consistently staying below the $60 per barrel threshold for most of December. This relief at the pump comes at a crucial time for consumers who are grappling with rising costs in other areas, such as groceries and holiday gifts, amidst ongoing inflation and tariffs on foreign imports imposed by U.S. President Donald Trump.
Government data revealed that consumer prices eased in November, showcasing a modest rise of just 2.7% compared to a year earlier. Nonetheless, overall year-over-year inflation continues to exceed the Federal Reserve's target of 2%. Economists have expressed skepticism about last month's figures, suggesting potential delays and distortions due to the recently ended 43-day federal shutdown.
The persistent high cost of living has heightened anger and frustration among Americans, particularly regarding uncertainty in the job market. Recently, the Conference Board released a report indicating that its consumer confidence index dropped in December to its lowest level since April, signaling growing concerns among consumers.
As the holiday season approaches, lower gas prices provide a welcome relief for drivers, although ongoing economic challenges remain a significant concern for many. With prices still fluctuating and the economic outlook uncertain, consumers are likely to continue keeping a close watch on their budgets this festive season.
