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Gas Prices Fall to Under $4 a Gallon Nationwide. How Much Lower Will They Go?

Man at a gas pump
The nationwide average for a gallon of unleaded was $3.99 on Aug. 11.
Xavier Lorenzo/Getty Images

What's happening

After reaching an all-time average high of $5.02 in mid-June, the national average for a gallon of gas has finally slipped back under $4.

Why it matters

Lower prices would help American households battle ongoing inflation.

Almost two months after gas prices hit an all-time high of $5.02 nationwide, they have fallen to under $4 for the first time since March. The national average for a gallon of unleaded on Aug. 11 was $3.99, according to AAA

Several factors have fueled the price decline, including Americans limiting their driving: Gasoline consumption is down almost 10% from last summer, according to the US Energy Information Administration.

The cheaper cost of oil has also led to lower prices at the pump: While Brent crude futures, an international benchmark, rose by 68 cents on Wednesday, to $96.99 a barrel, they are still under the $100 line. (US West Texas Intermediate crude futures gained 83 cents, to $91.33.)

Patrick de Haan, head of petroleum analysis at GasBuddy, correctly predicted in a July 18 blog post that the nationwide average would fall to $3.99 by mid-August.   

Here's what you need to know about gas prices, including where they might go next and what the White House is doing to keep them in check.

For more on the gas crisis, find out which states are holding gas tax holidays and which are issuing gas rebate checks, and check out quick tips for saving money at the pump.

How low could gas prices go?

The steady decline is due to lower demand for gas coupled with lower oil prices: In the first week of August, crude oil dipped below $90 a barrel for the first time since Russia invaded Ukraine in February. It's remained under $100 since then.

Though we're a far cry from the $2.70 a gallon average we saw in 2019, we're only 80 cents a gallon shy of the $3.19 average seen this time last year. 

De Haan, whose own estimate puts the national average at $3.98 a gallon, predicts gas prices will fall to $3.89 "by early next week."

But we're not out of the woods, he cautions.

"We've never seen anything like 2022 at the pump, highlighted by once-in-a-lifetime events including the ongoing Covid-19 pandemic, which caused myriad imbalances, exacerbated by Russia's war on Ukraine," De Haan said in an Aug. 9 blog post. "While the recent drop in gas prices has been most welcomed, the issues that led to skyrocketing prices aren't completely put to bed, and still could lead prices to eventually climb back up, should something unexpected develop."

Why has gas been so expensive?

Russia's ongoing invasion of Ukraine is an obvious factor. According to the White House, the war raised gasoline prices by more than $1.70 per gallon at its peak. Even though the US doesn't import much crude from Russia, oil is traded on a global market and any change affects prices all over the world.

By June 13, gasoline had hit $5.02 a gallon -- a record dollar amount, though still lower than the 2008 peak of $4.14 once adjusted for inflation.  

But the Russian invasion isn't the only factor: Even though demand is nearing pre-pandemic levels, producers are still hesitant to increase production.

"We've had a supply-and-demand imbalance for a while," Troy Vincent, a senior market analyst at energy analysis firm DTN, told CNET. "And it will remain, regardless of whether this conflict goes away."

A Washington, DC, gas station shows gas prices above $5 a gallon.

Gasoline reached an all-time high of $5.02 in June.

Win McNamee/Getty Images

President Joe Biden has also accused top oil companies of profiteering.

"Amid a war that has raised gasoline prices more than $1.70 per gallon, historically high refinery profit margins are worsening that pain," Biden wrote in a June 15 letter to the heads of Exxon Mobil, Chevron, Shell and other companies.

What has the Biden administration been doing to lower gas prices? 

In March, the White House began releasing 1 million barrels of oil a day from the US Strategic Petroleum Reserve. The unprecedented withdrawal, expected to last for six months, could lower gasoline prices between 10 and 35 cents a gallon.

"It will lower the oil price a little and encourage more demand. But it is still a Band-Aid on a significant shortfall of supply," Scott Sheffield, chief executive of Texas oil company Pioneer Natural Resources, told The New York Times.

In April, the Environmental Protection Agency approved year-round sales of E15 gasoline, a cheaper, higher-ethanol fuel. The impact has been modest, as only about 2,500 of the more than 100,000 gas stations nationwide sell the blend.

The US is also looking at getting energy products from other sources: Biden went to Saudi Arabia earlier this month, in part to encourage the kingdom to increase output. But it and other OPEC nations say they're already pumping at full throttle.

Relief isn't likely to come from outside OPEC, either: This year, major oil companies like Shell, BP and Exxon Mobil are expected to invest half of what they did in production a decade ago.

The Biden administration has been working to improve diplomatic relations with Venezuela, which has been banned from selling oil to the US since 2018. And the White House is negotiating another nuclear nonproliferation treaty with Iran, which could bring Iranian oil back onto the market.

How can drivers save at the pump?

Though gas prices are going down, they're still higher than usual. You can cut down on nonessential trips and shop around for the best price, even crossing state lines if it's convenient.

Apps like Gas Guru scan for the best gas prices in your region. Others, like FuelLog, track your car's gas mileage and can help determine if it's getting decent fuel economy. In addition, many gas station chains have loyalty programs, and credit cards have rewards programs that give cash back for gas purchases.