The average price of regular gasoline in the United States has significantly decreased compared to last year at this time, standing at $3.16 per gallon, an 11% drop, according to the automotive association AAA. This price reduction is one of the most evident consequences of the rapid inflation experienced by the country. The last time the average price was below $2 was in June 2020, during the early months of the pandemic when oil demand collapsed.
After the Russian invasion of Ukraine, the cost of gasoline skyrocketed to $5 per gallon, which significantly contributed to the acceleration of global inflation. Although the president may have some influence on fuel prices, they primarily depend on market dynamics. The sale of fuel from a national reserve and the relaxation of certain gasoline manufacturing standards by the Biden administration have contributed to the decrease in prices.
The price of oil has remained around $72 a barrel amid signs suggesting a potential global oversupply. Although lower gasoline prices have created a positive sentiment among consumers, some analysts warn that it is unlikely to return to pre-pandemic levels. Additionally, changes in consumer behavior and rising operating costs, such as labor and credit card fees, have influenced the current pricing dynamics.
Another aspect to consider is that large convenience store chains play a crucial role in gasoline pricing, and they are expected to open their taps more to adjust to the drop in prices. On the other hand, the decline in gasoline prices has positively impacted American spending, now making up about 2% of their disposable income, less than in pre-pandemic periods. However, the price of diesel has decreased even more than that of gasoline.
Despite the current situation of lower prices, the stability of the oil market depends on various international factors, such as potential conflicts in the Middle East that could affect production and transportation. In a context where gasoline is a key indicator of the economy and personal finances, the global trend points toward greater energy efficiency and the adoption of electric and hybrid vehicles as part of efforts to reduce fossil fuel consumption.
