Gas prices have dropped below $4 for the first time in over five months; good news for consumers who are grappling with the increasing costs of many other necessities.
According to a report, AAA said the national average for a gallon of regular was $3.99 on Thursday, down from the mid-June record of $5.02. However, that’s still about 80 cents higher than the average a year ago.
Energy is an essential element in the price of many goods and services. And the lower prices for gas as well as airline tickets and clothing can give consumers a sigh of relief, though inflation is still close to a four-decade high.
Glen Smith, a for-hire driver, sized up the price — $3.85 a gallon — while waiting between rides at a gas station in Kenner, Louisiana.
“I’m not tickled pink, but I’m happier it’s less than what it was,” Smith said. “There for a while, every two days, I put $50 of gas in my car. It’s $12 to run from the airport to drop off in the city — $12 a trip!”
Oil prices started to increase in the middle of 2020 as economies recovered from the initial shock caused by the pandemic. They climbed again when the U.S. and its allies announced sanctions against Russian oil in connection with the nation’s conflict with Ukraine.
Recently, however, oil prices have dipped on concern about slowing global economic growth. U.S. benchmark crude oil has recently dropped close to $90 a barrel from over $120 a barrel in June.
It’s unclear if the gas prices rose so high that consumers cut back on driving. Some experts believe that is true, although they acknowledge that the evidence is largely anecdotal.
“I don’t know that $5 was the magic amount. I think it was the amount of increase in a short period of time,” said Peter Schwarz, an expert on energy pricing and an economics professor at the University of North Carolina at Charlotte. “People were starting to watch their driving.”
Schwarz believes that oil prices will remain fairly stable at least for the next month or so, particularly after OPEC and partners, including Russia, agreed to only a small oil production increase in September, which won’t be enough to drive prices lower.
The cost of fuel is expected to become a major concern heading into the mid-term elections that will take place in November.
The national average for gas hasn’t been below $4 since early March. Per AAA, prices peaked at $5.02 a gallon on June 14. The prices dipped slowly throughout the rest of June, then dropped more rapidly.
Motorists in California and Hawaii are still paying above $5, and other states in the West are paying close to that. The cheapest gas is in Texas and several other states in the South and Midwest.
A year ago, the nationwide average price was just under $3.19 a gallon. Following a long climb, that price has dipped steadily this summer, falling 15 cents in the past week and 69 cents in the last month,
“If you talk to people who are not economists, gas prices always go up faster than they come down,” said Schwarz, the energy-pricing expert. “These are still high gas prices.”
This story originally appeared on AP News.