Drivers finally got some relief at the pump on Tuesday. The national average price for a gallon of regular gasoline fell to $3.9788, according to motor club AAA. That’s the first time it has been below $4 since July 20.
A day earlier the average stood at about $4.01. A week ago it was $4.15, and a month ago it was nearly $4.37, so prices have been sliding quickly. On Election Day the national average was $4.14, NBC News reported.
Why prices are dropping
The biggest driver has been oil. Oil futures plunged 13% last week, and for Brent crude, the global benchmark, it was the biggest one-week percentage drop since April 2020, when the Covid pandemic first shut down the global economy, according to NBC News. Brent has since slipped to about $89 a barrel, The Washington Post reported.
That slide has come as President Donald Trump repeatedly played down the prospect of renewed strikes on Iran. On Monday he told reporters at the White House that Iran is “effectively over” militarily and that “we’re seeing momentum toward the end of this conflict. I think it’s going to be ending fairly soon.” Markets have also been watching new U.S.-brokered talks between Russia and Ukraine.
The calendar is helping too. Federal rules require gas stations to sell a more expensive summer blend from June 1 to Sept. 15, and stations have now switched to the cheaper winter blend, CBS News noted. Demand also falls off after the summer driving season ends, and AAA says winter typically knocks 10 to 30 cents off a gallon.
Still far above last year
The relief has limits. Gas remains more than 30% more expensive than it was when the Iran war began on Feb. 28, and about 40% higher than at the start of the year, according to NBC News. A year ago, AAA’s national average was about $3.07.
Diesel, which powers trucks and farm equipment and is the same basic product as home heating oil, is still painful. AAA puts the national diesel average at about $6.16 a gallon, not far below the record of $6.53 set on Sept. 22.
Some states are already well under the $4 mark. As of Monday, 26 states had averages below $4, with North Carolina lowest at $3.26, Scripps News reported.
What comes next
With oil falling and winter blends in place, analysts expect pump prices to keep easing in the coming days, NBC News reported, though much depends on whether the Iran conflict actually winds down as Trump says it will.