By Nathalie Voit
Consumers are finally benefitting from lower prices at the pump.
The national average for a gallon of regular gas fell to $3.88 on Aug. 24 after declining for more than 70 days in a row. Compared to one month ago, prices are 49 cents cheaper, AAA data showed.
Although prices are still 73 cents higher relative to the same period last year, the recent drop in the price of gas has been significant. According to a report from Bespoke Investment Group, the downward decline in gas prices is the second longest on record, dating back to 2005. The only other time gas prices fell for that long was during the fall and winter of 2014-15, when the economy recorded 117 days of falling gas prices. Even then, this summer’s tumble has been steeper in terms of percentage decline.
The drop-off can be attributed to easing oil prices and reduced consumer demand.
According to CNN, fears of an imminent U.S. recession have knocked down oil prices.
On the supply side, President Joe Biden’s unexpected release of emergency oil from the national stockpile also likely played a role in easing costs.
At the same time, consumers have changed their behavior in response to surging gas prices. According to a recent AAA survey, about two-thirds of Americans have updated their driving habits since March to cope with the higher cost of gas. Respondents reported driving less and combining errands, activities that introduced some downward pressure on the oil market.
Gas prices fell after the national average hit a record reading of $5.02 a gallon in mid-June. At its peak on June 14, the national average was up by an astounding 50% year-over-year.
To date, gas prices are roughly 19% higher than last year.
