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Why gas prices are falling to a low not seen in years in the summer

Key findings

  • The average price of a gallon of gasoline has dropped significantly since last month and even more compared to the same period last year.
  • According to AAA, it was a mild summer in terms of gasoline prices across the country.
  • The geopolitical impact on gas prices is currently minimal and the storm season has not significantly disrupted production this summer.

It may still be summery hot, but for drivers the gas prices may already feel a bit like spring.

According to AAA, national gasoline prices averaged $3.36 per gallon over Labor Day weekend, near the lowest level since March. The average is 14 cents below the previous month's level and $1.66 below the all-time high set in June 2022.

Gasoline prices have been lower this summer than they have been in recent years. AAA data shows the national average price of gasoline is about 50 cents per gallon lower than it was during the same period over the past two years. However, the national average is about 20 cents higher than during the same period in 2021.

Why are gas prices lower this summer?

Geopolitical tensions currently have only a limited impact on gas prices and ceasefire talks could further calm oil investors' concerns.

A relatively quiet storm season is also helping to keep prices low. Limited disruptions at gasoline-producing oil refineries are helping to lower gasoline prices and could help keep prices stable for the rest of the year, analysts said.

“The war clouds overseas are less gloomy at the moment and the Atlantic is also now calm, which is easing the pressure on oil prices,” AAA spokesman Andrew Gross said in a press release.

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