Is the Great Gas Price Hike of 2022 Over?

Gas prices are the lowest they’ve been since early spring 2022. That’s right, the great gas hike of 2022 is coming to an end (fingers crossed). 

Gas Prices Are Falling

Last week the average national regular gas price dropped below $4 per gallon for the first time since March, according to AAA. As of publication, the average price of a gallon of regular gas is 3.943, down seven cents from last week and nearly 60 cents from a month ago. But that’s still more than 75 cents higher than this time last year. 

Daily Decline Streak

The average national gas price has declined every single day since its June 14 peak at $5.02. That’s a 63-day streak of falling gas prices. 

Some of this relief comes from a global decline in demand for a number of reasons including COVID shutdowns in China and reduced driving in response to the high prices. 

And fuel released from the Strategic Petroleum Reserve has increased supply and helped lower prices. 

Even With Prices Falling, Americans Are Driving Less

A survey by AAA found drivers are changing their driving habits to keep their gas consumption in line with their budget. In fact, more than 60 percent of US adults already made changes since the historic rise in gas prices began this spring. 

Those plans include driving less, combining errands, reducing shopping and dining out trips, putting off large purchases, postponing vacations, carpooling, using public transportation, and even switching to an EV or more fuel-efficient car.

Consumer demand for fuel has gone up as prices have gone back up, but it’s still hundreds of thousands of barrels a day lower than it was at this time in 2021. 

Will Gas Prices Go Back Up?

Experts disagree on whether gas prices will continue to drop, level out, or go back up. But all sides of the argument agree on the uncertainty the future holds. 

Here are the factors that will affect gas prices going forward:

• Inflation has slowed much faster than expected. But is that trend sustainable?
• Trading prices for oil stocks and oil futures have increased some in the past week.
• Car owners are still using less fuel as prices drop, keeping demand low.
• The passage of the Inflation Reduction Act should continue to lower consumer prices. [link to inflation story]
• National Petroleum Reserve releases will slow or cease. 
• The Energy Information Administration (EIA) has predicted a price-per-gallon dip to $3.78 in the fourth quarter. 
• Hurricane season is unpredictable and far from over. 

What Do These Gas Prices Mean for You?

Well, you’re certainly going to be saving money at the pump in the coming weeks, and possibly even months. After such a high price hike this summer, however, it’s doubtful prices will dip back to pandemic levels.

Many Americans have an opportunity to save money when they sell their combustion engine vehicle and make the switch to an EV. Language in the new  Inflation Reduction Act signed into law this week sets aside up to $7,500 in tax credits for anyone who purchases a qualifying new EV. And the law will eventually extend that credit to used EVs with $4,000 in credits. 

Read more about how the Inflation Reduction Act can save you money by switching to an EV. And if you do make the switch, Carmigo can save you money when you sell your car.