Holiday Fuel Bonus: Lowest Priced Christmas Gasoline Since the Pandemic
Holiday Fuel Bonus: Lowest Priced Christmas Gasoline Since the Pandemic
This year, GasBuddy anticipates that Americans will encounter the cheapest Christmas Day gas prices since 2020's pandemic period. The app, which collects fuel price data from various sources, predicts a national average of $3.01 per gallon on Christmas Day. This figure represents a slight decrease from last year's $3.10 and the 2021 record of $3.26.
Patrick De Haan, GasBuddy's petroleum analysis head, commented, "Fortunately, filling up is not the top priority for people anymore when they hit the road these days."
As per AAA projections, approximately 107 million Americans are expected to travel by car during this holiday season (from December 21 to January 1), which is a 2% increase compared to 2021's 104.5 million. This figure is slightly lower than 2019's 108 million travelers prior to the pandemic.
Car rental companies, such as Hertz, have reported high demand for vehicles in cities like Denver, Las Vegas, Los Angeles, Miami, and Oahu.
The pandemic significantly reduced travel in 2020, leading to very low gas prices for Christmas Day. The national average at that time stood at $2.26 per gallon, according to GasBuddy.
Although gas prices have dropped since they reached record highs of $5 per gallon nationally in 2022, Americans still pay more for fuel than they did before the pandemic. For example, the national average on Christmas Day in 2019 was only $2.54, and in 2018, it was $2.29.
Even though many Americans are earning more money since the pandemic, the real cost of gas is still low compared to their wages. GasBuddy revealed that the time required for the average American to buy a gallon of gas recently reached nine-year lows, excluding the pandemic, as of December 8. The average person now only needs to work 5.4 minutes to purchase a gallon of gas, compared to nearly 7 minutes in December 2021 and 4.9 minutes in 2020.
De Haan commented, "The pump price might seem high, but you're working less time to fill up your tank."
Donald Trump, who was the President-elect at the time, frequently promised to lower gas prices even further. His energy plan centered on increasing drilling and production by loosening environmental regulations and expediting permits.
However, the United States was already producing more oil than any country in history. It remains unclear whether US oil output can significantly increase further or if there's enough demand for additional supply given relatively low oil prices.
Despite ongoing tensions in the Middle East and the ongoing conflict between Russia and Ukraine, US oil prices closed last week around $70 per barrel. This is quite different from the $120 per barrel spike in 2022, which occurred after Russia invaded Ukraine.
Federal Reserve Chairman Jerome Powell stated at a press conference last week, "The price of oil has been decreasing due to supply factors. The US is not currently experiencing the effects of geopolitical turmoil."
In an attempt to increase demand for domestic energy, Trump threatened tariffs on France, Germany, and other EU nations in late 2021 unless they promised to buy large quantities of US oil and gas.
GasBuddy initially projected a Christmas Day gas price of $2.95 per gallon, but a recent increase in gas prices in certain regions, particularly in the Great Lakes region, led to an upward revision of the forecast by De Haan.
Despite the rise in prices, 11 states still have an average gas price below $2.80 per gallon, including Texas, Kansas, Oklahoma, Missouri, Delaware, and South Carolina, according to AAA.
The increase in car travel during the holiday season, with 107 million Americans expected to hit the roads, might positively impact the local business scene in cities with high car rental demand, such as Denver, Las Vegas, and Miami. This drop in gas prices, with Christmas Day expected to be the cheapest since 2020, could also encourage more leisure driving and spending at local businesses.