Gas prices have been top of mind for the last year as prices soared to almost $5 a gallon as a nationwide average, with prices going much higher in some states and cities.
However, prices are now down an average of 7.2% since March 2022, and again some places have seen steeper declines than others. As of March 1, the average price nationwide was $3.36 per gallon, versus $3.62 one year ago.
LendingTree.com put together a study of nationwide gas prices, showing who’s paying more and who’s paying less at the pump. The data comes from AAA and from the U.S. Energy Information Administration (EIA).
The long hot summer of 2022
If you look at the whole year of 2022, the national average price of gas was $3.95 per gallon, and it peaked in June and July. The lowest prices were recorded at the end of the year in December, and the drop-off has continued into 2023.
Not surprisingly, the highest prices last year were found in Hawaii at $4.88 per gallon average, and in California at $4.79. Nevada was not far behind at $4.27 on average. However, during the summer months in high-overhead city locations, prices topped $7 a gallon.
On the other hand, the lowest-priced places to buy gas in 2022 were Texas at $2.91, along with Mississippi at $2.96 and Kentucky at $2.97.
According to LendingTree’s report, the high prices can be traced to a number of causes, but primarily because of Russia’s invasion of Ukraine, which shut down imports of Russian fossil fuel products. Before the invasion, the US imported up to 700,000 barrels of Russian crude oil and refined petroleum every day. Europe also shut down Russian oil imports, which drove the global market price for oil much higher last summer.
The falling price of gas now represents a drop in demand. With fears of recession and a general discomfort with high gas prices, consumers change their behavior. We’re driving less and not taking big road trips as often. High gas prices also drive companies and individuals to embrace remote work and other trip-saving behaviors. Demand for petroleum has ebbed worldwide primarily due to high gas prices.
Not the worst we’ve seen
Time heals all wounds, and it’s tempting to think 2022 was the worst we’ve ever seen in gas prices, but it wasn’t. When adjusted for inflation, national average gas prices reached a high of $4.41 in 2008, then $4.58 in 2011, and the highest-ever $4.61 in 2012, before falling to $4.40 in 2013 and $4.15 in 2014. That’s compared to the average of $3.95 in 2022.
In the early 2010s, we saw people trading in their huge, gas-guzzling V-10 pickup trucks and used car dealerships with hand-lettered signs across their driveways stating “NO TRUCKS,” but the high prices of 2022 did not elicit the same response. Perhaps the public is used to the fluctuations in price now, and we grumble, but we don’t sell our SUV because of it.
The best and the worst of 2023
The best and worst places to buy gas this year are predictable so far, and they pretty well match last year’s locations. Hawaii, which has no gas refineries and thus imports all of its gasoline by ship, has the highest prices right now, still riding at an average of $4.88 per gallon. California, Nevada, Washington, and Colorado round out the top five, all above $4 per gallon.
Surprising no one, Texas is still the cheapest place to buy fuel, averaging $2.91 per gallon. Mississippi, Kentucky, Missouri, and South Carolina are still among the most affordable states for gas. All are at or under $3 per gallon.
“There are plenty of reasons why these states rank lowest, but a big part of it is simply that with all the refineries along the Texas and Mississippi coast, it’s pretty easy and inexpensive to get gas to gas stations in these states,” said LendingTree chief credit analyst Matt Schulz. “In addition, those two states have among the lowest gas tax rates in the nation.”
Wherever you are, Schultz has a suggestion to get the best deal on fuel: compare prices in your local area and buy gas from the dealer with the best prices. Those are often found in areas with high concentrations of gas stations that have to compete for business.
“Obviously, it doesn’t make sense to drive across town to save 3 cents a gallon, but the truth is that gas prices can vary quite a bit even in a small area,” he said. “Driving an extra few blocks for a lower price on gas can add up over a year, depending on how often you fill up.”