AAA says a gallon hits 4-year low as holiday travel starts

Holiday road-trippers are in for a pleasant surprise this year as gas prices have dropped significantly, providing relief at the pump. According to AAA, the average price of unleaded gasoline in the U.S. has dipped below $3 a gallon for most of December, marking the lowest levels since 2021. This makes it the most affordable December for drivers filling up their tanks since the onset of the pandemic in 2020.

Data from AAA reveals that fuel prices have decreased by about 7% compared to a month ago and have plummeted by approximately 43% from the peak prices seen in mid-2022, when gas prices reached nearly $5 a gallon due to rampant inflation following the pandemic.

The timing of this price drop couldn’t be better as AAA anticipates a record number of more than 122 million Americans will be traveling at least 50 miles from home during the 13-day period between December 20 and January 1. Of these travelers, nearly 110 million are expected to hit the road by car.

The decrease in gas prices is a welcome relief for consumers grappling with inflation in other areas during the holiday season. A recent CNBC survey revealed that over 40% of respondents are planning to spend less this year, with 46% attributing their budget cuts to the high cost of goods.

Despite the national average showing a decline in gas prices, there are significant regional differences. States like Hawaii and California are still experiencing average gas prices above $4 per gallon, while in Oklahoma, prices are hovering just below $2.30 per gallon.

Overall, the drop in gas prices comes as a boon for holiday travelers, offering some financial respite during a time when many are looking to tighten their belts. As we head into the new year, the lower cost of fuel is a welcome development for consumers and may help ease the burden of holiday expenses.