U.S. motorists may soon experience gasoline prices dropping below $3 per gallon for the first time in more than three years, potentially just before the November presidential election, according to analysts. This decline in prices is driven by decreased fuel demand and falling oil prices, providing some relief for consumers who have been facing record-high fuel costs amidst ongoing inflation.
As reported by the AAA, the national average price for regular gasoline was $3.25 per gallon as of Wednesday, a decrease from both last month and last year. Patrick De Haan, an analyst at GasBuddy.com, predicts that prices could fall below $3 per gallon by late October, citing the end of the summer driving season and the transition to cheaper winter-grade fuel. Notably, prices in North Carolina, a pivotal swing state for the upcoming election, were already below this threshold.
“Americans will definitely remember the price they see when they drive into polling stations, so this is definitely good news for Harris in her campaign for president against Republican Donald Trump,” De Haan remarked. Research, including studies by the Wells Fargo Investment Institute, suggests that U.S. presidential approval ratings often inversely correlate with gasoline prices, implying potential electoral advantages for Democrats as prices drop.
Despite this, it’s important to note that presidents have limited direct control over gasoline prices, which are primarily influenced by global supply and demand dynamics. This year, a significant decline in demand, particularly in the U.S. and China, along with a decrease in the price of Brent crude—from over $90 a barrel in April to under $70—contributed to the lower gasoline prices.
Adding to the complexity of the situation is Hurricane Francine, which recently threatened U.S. offshore oil operations, causing a brief spike in crude prices due to concerns over potential production disruptions. This event underscores the volatility of oil prices, which soared to over $5 per gallon in 2022 due to supply disruptions following Russia’s invasion of Ukraine and a surge in global demand post-COVID lockdowns.
Despite a slight expected decrease in U.S. gasoline demand this year, the U.S. remains the world’s largest fuel consumer, highlighting the significant impact of fuel prices on economic and political landscapes.