The U.S. average price for a regular gallon of gas at the pump was $2.22 before Labor Day weekend, and this was the lowest price at this time of year since 2004, according to the U.S. Energy Information Administration (EIA).
U.S. gasoline prices are low because of continued low demand for gasoline since mid-March when travel demand fell because of the efforts to mitigate the spread of COVID-19. Gasoline prices fell to a low of $1.77 on April 27. The price rose to more than $2 per gallon by early June and has remained flat from July to August. Prices were still about 18% lower than they were at the same time last year.
Monthly gasoline consumption in the United States fell to a low of 5.85 million barrels per day in April, and this was the lowest amount of product supplied since 1974. Efforts to mitigate the spread of COVID were most widespread in April as U.S. gasoline product supplied was down nearly 37% from the same month in 2019.
Gasoline consumption rose to nearly 90% of levels seen last year by the end of June. The consumption has remained flat through the end of August. Gasoline demand is about 9% lower than the five-year (2015-19) average.
Despite several unplanned refinery outages because of Hurricane Laura, high gasoline inventories on the Gulf Coast continued to put downward pressure on regional retail prices. The prices rose 2.3 cents per gallon as of Aug. 31. Hurricane Laura made landfall near the Texas/Louisiana state line Aug. 27 as a Category 4 storm.
“It’s typical to see increased demand and more expensive gas prices ahead of a storm, especially one that threatens rigs and refineries in the Gulf of Mexico region,” said Jeanette Casselano, director of AAA Public Relations. “The latest industry reports indicate that facilities in Texas have already begun the restarting process, which means there is no major threat to gasoline stocks, and gas prices should push cheaper.”
Arkansas, with an average price of $1.92 per gallon, is the fourth-least expensive market for gasoline prices in the United States, according to the AAA. Mississippi is the least expensive market at $1.88 per gallon.