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As electric vehicle (EV) makers have discovered, America runs on gasoline. About 290 million registered vehicles cruise the roads. U.S. drivers spend about $550 billion a year on fuel. That is over $2,500 per household. The median after-tax income of Americans is about $60,000. So, cheap gas is not a trivial contribution to help U.S. household spending.
According to Patrick De Haan, head of petroleum analysis at GasBuddy, “Just ahead of Christmas, the national average stands at its lowest level since March 12, 2021, delivering weekly savings of nearly $400 million compared to this time last year.” The current gas price is $2.85 for a gallon of regular nationwide. The research firm believes the figure could drop more between now and year’s end.
Some states have much lower gas prices than the national number, and a continued decline could bring their prices close to $2. In Oklahoma, the average price is $2.22. In Colorado and Texas, they are $2.39 and $2.41, respectively. Some states have plunging gas prices. Just in the past week, Nevada’s has dropped 13.2 cents, Indiana’s and Utah’s by 12.6 cents each, Ohio’s by 11.6 cents, and Oregon’s by 11.3 cents.
The primary reason gas prices have fallen is a sharp drop in oil prices. Benchmark West Texas Intermediate crude is priced at $56 a barrel. That is down from $80 in January. The United States is pumping crude at near record rates, while Russian oil is sneaking into India and China, and OPEC+ has cut high production levels, though not by much. All this is to say that gas prices will remain lower, which is a benefit to consumers. Among the only components of the consumer price index that continue to fall are fuel and oil.
If “affordability” is indeed the primary financial complaint among Americans and their household incomes are stretched to a breaking point, gas prices are among the few silver linings. American consumers need the help.
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