HOUSTON — Drivers hitting the road for the holiday weekend will find the cheapest gasoline in three years, as lower crude oil prices and steady refinery output push pump prices down across most of the country.
The national average for a gallon of regular gasoline fell to $3.08 on Wednesday, down 9 cents from a week ago and about 30 cents from the same time last year, according to the Roadway Motorists Association, which tracks prices at more than 100,000 stations.
Why prices are falling
Analysts attributed the decline to lower crude oil prices, which make up roughly half the cost of a gallon of gasoline. U.S. crude has traded near $78 a barrel in recent weeks, down from above $90 at one point last year, as global production has risen and demand growth has slowed in several large economies.
Refineries have also been running smoothly after a spring maintenance season with few unexpected outages, and gasoline inventories are above their five-year average for this time of year.
All the ingredients for cheaper gas are lined up right now: soft crude, plenty of refinery capacity and healthy stockpiles. Unless a hurricane or an unexpected outage gets in the way, prices should stay relatively calm through the holiday.
Raymond Kowalski, senior petroleum analyst, Gulf Coast Energy Watch
- $3.08: national average for regular gasoline
- 30 cents: decline from a year ago
- $3.79: national average for diesel
- 44 million: people expected to travel by car over the holiday weekend
Prices vary widely by region
As usual, prices differ sharply depending on where drivers fill up. The cheapest gas was found in parts of the Gulf Coast and the South, where several states averaged below $2.80. The highest prices remained on the West Coast, where averages topped $4.20 in some states because of higher taxes, stricter fuel blends and a limited number of refineries.
Drivers in the Midwest saw some of the biggest weekly drops after a pipeline repair finished ahead of schedule and supply returned to normal. The lower prices come as a record number of Americans are expected to travel over the holiday. The association estimates 44 million people will drive at least 50 miles from home, up about 2 percent from last year.
At a busy station off Interstate 10 in Houston, drivers welcomed the relief. “Last summer it cost me almost $70 to fill up the truck,” said Luis Herrera, a contractor heading to visit family in San Antonio. “Now I’m under $60. That’s dinner for the kids on the road.”
Economists say cheaper fuel can give consumer spending a modest lift, since money not spent at the pump can go toward other purchases. Lower diesel prices also reduce costs for trucking companies and farmers, which can ease price pressures on goods over time.
Still, analysts cautioned that prices can turn quickly. Hurricane season does not end until late November, and a storm that disrupts Gulf Coast refineries could send prices up within days. Changes in global oil supply decisions could also lift crude prices.
For now, the association expects the national average to hover between $3.00 and $3.15 a gallon through the end of the month, with some states potentially dipping below $2.75. Analysts recommend that drivers compare prices before filling up, since stations a few miles apart can differ by 20 cents or more a gallon, particularly near highway exits and in tourist areas, where prices tend to run higher than in nearby neighborhoods.
