Gas prices are finally coming down. Here are 4 things to know: NPR

A gas pump is seen at a gas station in Houston on June 9. Gas prices have fallen below $4 a gallon in parts of the country, although the national average is still above that level.

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A gas pump is seen at a gas station in Houston on June 9. Gas prices have fallen below $4 a gallon in parts of the country, although the national average is still above that level.

Brandon Bell / Getty Images

Filling the gas tank was not as painful as before.

Gasoline prices have fallen sharply in recent weeks, after hitting a record high earlier this summer. They are now under $4 a gallon in parts of the country, even as the national average remains above that level.

This is a relief for drivers – and for inflation that hit a Four-decade high in June.

How much have prices dropped?

According to the American Automobile Association, the average price of gasoline nationwide was $4.08 on Saturday. That’s down nearly a dollar since mid-June, when pump prices hit an all-time high of $5.01 a gallon.

Some parts of the country, such as Texas, have seen sharp declines, bringing relief to drivers who saw prices soar earlier this year after the Russian invasion of Ukraine.

“I filled up yesterday and it was $3.35. So yeah, I was excited about it,” says Linda McDaniel, who drives 60 miles every day to her job in San Antonio. “Because I have such mobility, I drive a Honda Civic, which gets good gas mileage. But with these higher prices, filling up my tank was costing me a lot more.”

What is behind the sharp drop in gasoline prices?

It is partly a function of supply and demand.

When pump prices exceeded $5 a gallon, drivers modified their behavior, in an effort to limit how much they drove. They assembled cars, collected errands, and cut off unnecessary trips.

McDaniel canceled a road trip to Colorado this summer.

gasoline consumption In the US it’s down about 9% in recent weeks than it was last summer – a pretty big drop in demand.

At the same time, Domestic crude oil supply It has increased by more than 6% from last year.

growing concern about economic slowdown Worldwide it has also affected the price of crude oil, which accounts for about half the cost of gasoline.

All this is a recipe for lower prices at the pump.

“Collectively, Americans will spend $340 million less on gasoline than they did on June 16 when prices peaked,” says oil analyst Patrick de Haan of price tracking website GasBuddy.


A customer shops at a grocery store on July 15 in Houston, Texas. Lower gas prices in parts of the country may ease inflation, although consumer prices remain high.

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A customer shops at a grocery store on July 15 in Houston, Texas. Lower gas prices in parts of the country may ease inflation, although consumer prices remain high.

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What does this mean for inflation and the cost of things?

Lower gas prices will certainly help in terms of cost of living.

The annual inflation rate in June was 9.1%, the highest level since late 1981, and gasoline prices were so A major driver of this increase.

The problem is that other prices have also gone up, including some of the more viscous gasoline prices, which tend to bounce up and down.

McDaniel, for example, rents two storage units and says rent has increased by $100 per month. She’s also worried about her utility bill, since her air conditioner was running overtime in the Texas heat.

“It’s been in the cent since May,” McDaniel says. “So the electric bills are out of this world.”

So far, consumers have seen little to no reduction in the cost of groceries or housing, both of which account for a larger share of the typical household budget than gasoline.

So, while many drivers will be grateful for cheaper gasoline, it’s not a panacea for inflation.

“Yes, it’s a welcome relief,” McDaniel says of gas prices. “But I mean, you can definitely see [inflation] In just about everything. As in the soda machine, the price rose 25 cents overnight. Just every little thing you notice goes up. Even a pack of gum went up 20 cents.”

Where do gas prices go from here?

Pump prices may drop further in the near term, but it’s hard to say what will happen later this year.

GasBuddy analyst De Haan expects the average price of gasoline across the country to drop to less than $4 a gallon in the coming days.

But he warns, there are some unruly papers out there. For example, a hurricane in the Gulf of Mexico could disrupt drilling rigs or refineries, impeding gasoline supplies.

Geopolitical threats in Europe or Asia may also cause gas prices to rise again.

All of this makes it difficult to determine if the pump’s comfort is here to stay.