The Fill-Er-Up Forecast
The average price per unleaded gallon of gas has now dropped to $3.329, down from an average of $3.343 per gallon this time last year, according to AAA. On top of that, GasBuddy, a company that tracks fuel prices, predicts that gas prices will continue to decline and could even fall below $3 by Christmas.
This news comes at the perfect time, as many Americans gear up for a holiday season that could involve plenty of driving.
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Behind the Prices
The global gas market is a complex web influenced by thousands of different factors. It’s difficult to know exactly why prices are on the decline, even while OPEC+ production cuts and the war in Ukraine suggest they should be trending in the opposite direction.
One reason gas prices could be declining is due to the fact that oil refineries are working overtime to make up for a diesel fuel shortage. Right now, there’s increased output, but no place to store it long-term. A surplus of supply tends to result in declining prices for consumers.
That said, industry experts have noted that the decline of gas prices could quickly reverse if China eases its COVID-19 restrictions. The reopening of the world’s second largest economy would drive a sharp increase in demand for oil and other natural resources, which would increase prices.
Looking Forward
Considering that gas prices hit $5.01 last summer, the news of $3 gas on the horizon is a breath of fresh air for many Americans. Families across the country can let out a collective sigh of relief that at least one of their monthly expenses appears to be decreasing.
On top of that, the decline in gas prices may impact other inflated expenses as well. For example, cheaper gas prices could also make it less expensive to heat your home or fly across the country.
No one wants coal in their stocking, but if other fossil fuels were on your wish list, it looks like Christmas came early this year.
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Gas prices are still high, but these tips can help you save
For American consumers, 2022 is shaping up to be a high-octane year. That’s because gas prices, much like other consumer goods, are breaching record levels across the country.
As of March 15, the national average price for a gallon of regular gasoline is $4.32. One year ago this week, a gallon of gas cost $2.86. The last time prices were this high was just prior to the Great Recession.
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“We haven’t seen prices like this since 2008,” says Lauren Fix, a sector analyst and automotive expert at Car Coach Reports.
Prices have effectively doubled in some parts of the country since last year, Fix says, and it’s weighing on consumers across the country.
“For every $1 per gallon in fuel cost increases, it costs the average consumer $500 per year. So, with gas being up almost $2 per gallon, the typical American is spending around $1,000 more this year just on gas,” Fix says.
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There isn’t an easy answer as to why gas prices have shot up so high, and so quickly. Perhaps the biggest factor is lagging oil production due to the pandemic, but the Russian invasion of Ukraine and supply chain troubles are also playing a role. “It’s a really complex topic,” says Fix. “We can’t just blame Putin.”
The cost of gas, as it reaches the end-consumer in the U.S., involves a complex mishmash of crude oil prices, taxes and other costs. Crude oil costs account for 56% of the end cost of a gallon of regular gasoline. Refining costs account for 14%, distribution and marketing costs eat up another 16%, and taxes amount to 15%. Increased costs for crude oil in recent weeks have had the biggest impact on prices at the pump, says Fix.
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Even with war breaking out in Europe and an ongoing pandemic, gas prices have come to dominate the discourse in the U.S. in recent weeks, as many Americans feel their budgets are stretched as far as they can go.
“Gas prices are all anyone is talking about on social media,” says Mia Bevacqua, an automotive expert, and chief mechanic at CarParts.com. “It’s just people talking about gas prices, memes about gas prices.” To compensate, she says, many people “are looking for ways to save. They’re changing their behaviors and habits.”
While buying an electric or hybrid car may be many people’s first instinct, sky-high car prices put that option out of reach for most people, too. For many households, the best course of action is to get creative in finding ways to save money on gas.
Fix and Bevacqua say consumers can try these tips to try and save money on gas.
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“Aggressive driving burns through gas more quickly,” says Bevacqua. She recommends laying off the gas, easing up on the brakes and aiming for a smoother ride whenever you’re behind the wheel.
Also, she recommends driving a bit slower, if the situation allows. “For every five miles per hour above 50, your fuel mileage decreases,” she says. “So, stick to the speed limit, or slightly below.”
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Small problems affect a car’s fuel efficiency, both Fix and Bevacqua say, so make sure you’re taking care of any small problems that arise and sticking to a regular maintenance schedule. An incredibly easy thing drivers can do is to check their tire pressure, Fix says, which can lead to better fuel efficiency.
“Inside your driver’s side door, there’s a sticker with a number on it. That number is the correct tire pressure for your car’s year, make and model. Get a pressure gauge, and check it when the car is cold,” Fix says. “Properly inflated tires can save you one to two miles per gallon.”
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Your car faces wind resistance as it moves down the road, and drivers can burn less fuel by making it as light and aerodynamic as possible. That can involve getting rid of bike racks or storage containers protruding from the vehicle, and keeping the windows closed.
“Also, dump any dead weight, like bags of clothes in your trunk that you’ve been meaning to donate,” says Bevacqua.
Fix agrees: “Seriously, take the junk out of your trunk,” she says. “It doesn’t cost you a nickel, and every pound counts.”
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Finally, both Fix and Bevacqua say you shouldn’t let your car idle.
“Forget the drive-through” says Fix. “Park your car, go inside, and get what you want. If you’re sitting in line, you’re getting zero miles per gallon.”
The same goes for warming up your car before leaving, or even waiting to pick up your kids from school. If you’re idling, you should shut off your car.
“If it sits more than 30 seconds, shut the vehicle off,” says Fix.
While these tips may make only a marginable difference in fuel costs, Bevacqua says that they can develop into habits that can pay off over time — for you, and for the planet.
“It’s always a good thing to try and conserve fuel, both for your wallet and the environment,” Bevacqua says.
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originally appeared on Policygenius.comand was syndicated
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