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The price for a gallon of gas continues to slowly fall after hitting a record $4.33 on March 11. The national average for a gallon of gasoline on Tuesday was $4.25, according to AAA.
The primary reason for the falling prices is the lower global price of crude oil, which peaked shortly after Russia launched its war in Ukraine, but is now more than $20 lower and hovering near $105 per barrel.
Domestically, gasoline demand is defying seasonal trends and has dipped slightly, perhaps in response to higher prices at the pump.
“Usually this time of year, with warmer weather and longer days, we’d see an uptick in gasoline demand as more people hit the road,” said Andrew Gross, AAA spokesperson. “But we had a slight drop in demand last week, which may be due to higher pump prices. In our new survey of drivers, 59% said they would change their driving habits or lifestyle if the cost of gas hit $4 per gallon. And if gas were to reach $5, which it has in the Western part of the country, three-quarters said they would need to adjust their lifestyle to offset the pump price.”
The drop in gas demand is contributing to price decreases, but the recent reversal in oil prices is creating downward pressure on pump prices. If the oil price continues to decline, pump prices will likely follow suit. However, should oil prices start to climb again, pump prices will likely follow.
While the slight decrease is a welcome relief for Americans, $4.25 is still 72 cents more than a month ago, and $1.37 more than a year ago.
Several states are considering temporarily suspending their gas tax to combat the high prices at the pump.
Maryland on Friday became the first state in the nation to suspend its gas tax. Republican Gov. Larry Hogan signed legislation that waived the 36.1 cents per gallon tax gas and its 36.85 cents per gallon tax on diesel, effective immediately, for the next 30 days.
Also on Friday, Georgia‘s Republican Gov. Brian Kemp signed a similar bill that eliminates the state’s roughly 29 cents per gallon gas tax through the end of May.
Michigan’s Democratic Gov. Gretchen Whitmer also called on a temporary suspension of its 6% tax on fuel – a move she said ‘will provide drivers relief at the pump right now – not next year.’
In California, state lawmakers proposed a $400 gas rebate to help drivers with the soaring gasoline prices.
