Gas Prices Likely to Decline in September

Michael Green

 

 

 

 

 

Reduced Driving and Switch to Winter-Blend Gasoline Should Bring Lower Prices

  • Gasoline demand and prices generally fall in September through the end of the year as people drive less and because refineries can produce less expensive winter-blend gasoline. AAA expects gas prices nationally could decline another 10-20 cents per gallon by the end of October.
  • “The big crunch in summer travel is done and most of us can look forward to lower gas prices during the next few months,” said Avery Ash, AAA spokesman. “If we can get through September without any major refinery or overseas problems, we should see more gas stations drop below $3.00 per gallon this fall.”
  • Last year, U.S. driving declined nearly 10 percent in September compared to August, according to the Federal Highway Administration. The decline in driving during cooler months helps to reduce gasoline demand. In addition, refineries will begin to sell less expensive winter-blend gasoline in many parts of the country on September 15, which should further push prices down.
  • Refineries in many regions are required to produce more expensive summer-blend gasoline during warm-weather months to prevent air pollution and smog. As the weather grows cooler, this gasoline blend is no longer required. In the days leading up to September 15, supplies of summer-blend gasoline occasionally can tighten before the deadline, which could lead to very short-term and localized price increases around the middle of the month.
  • The price of gas in September has declined four out of the five previous years for an average of eight cents per gallon. Last year, national average gas prices fell by 19 cents per gallon in September.
  • The Atlantic hurricane season reaches a peak around September 10. Major hurricanes can disrupt oil production, refinery facilities and pipelines, which can lead to significantly higher gas prices. In 2012 for example, Hurricane Isaac struck Louisiana and the brief closure of refineries helped increase the national average price of gas price by 11 cents per gallon over nine days.

Summer Driving Season Ends as Fourth Most Expensive on Record

  • The national average price of gas over the summer driving season was $3.58 per gallon, which was the fourth most expensive on record and fractions of a cent less than a year ago. The summer driving season runs from Memorial Day through Labor Day, and is the busiest time of the year for driving. The summer driving season average for the previous few years was $3.58 (2013), $3.55 (2012), $3.65 (2011), $2.73 (2010), $2.59 (2009) and $3.95 (2008).
  • “It was truly a summer of contrasts with consumers paying the highest seasonal prices in years to begin the summer, but ending with the lowest prices since 2010,” continued Ash. “Many drivers lucked out with it costing significantly less to fill up the car during the busiest part of the summer.”
  • Gas prices nationally averaged $3.46 per gallon in August, which was the least expensive average for the month since 2010. This average compares to $3.57 (2013), $3.69 (2012) and $3.62 (2011) in recent years. The national average price of gas was $3.60 per gallon in July and $3.67 per gallon in June.
  • Gas prices in most parts of the country have fallen significantly during the second half of the summer with the national average price of gas down about 25 cents per gallon since June 28. Gas prices unexpectedly increased in June as rebels intensified attacks in Iraq, but prices began to stabilize as the threat to Iraqi oil production diminished.
  • Domestic refinery and crude oil production has more than kept pace with high demand this summer, which has helped gas prices decline. In addition, oil prices have fallen despite multiple crises overseas because global production has not been significantly affected and domestic production remains strong. The price of West Texas Intermediate crude oil dropped to $92.88 per barrel to close yesterday. This settlement price was the lowest since January 14 and marked a $10 per barrel decline since early July. Approximately two-thirds of the cost of gasoline can be attributed to the price of crude oil.

Gas Prices Reach Six-Month Low to Begin September

  • Today’s national average price of gas is $3.43 per gallon. Consumers this week are paying the lowest average prices since late February. Today’s average is about 16 cents per gallon cheaper than a year ago and the lowest average for this day since 2010. The national average has remained under $3.50 per gallon for 31 consecutive days.
  • Gas prices this year generally have averaged less than in recent years due to an increase in domestic petroleum production. The national average price of gas through the first eight months of the year is $3.52 per gallon, which is the lowest average through the same period since 2010. Last year the national average through August 31 was $3.57 per gallon.
  • The five states with the highest average prices today include: Hawaii ($4.28), Alaska ($4.02), Washington ($3.88), Oregon ($3.87) and California ($3.84). The five states with the lowest gas prices today include: South Carolina ($3.17), Mississippi ($3.18), Virginia ($3.18), Alabama ($3.20) and Tennessee ($3.21).
  • About one-fourth of U.S. stations are selling gas for less than $3.25 per gallon today, while nearly seven-in-ten stations are selling gas for less than $3.50 per gallon. The most common price in the United States is $3.299 per gallon.

Related Articles

B-Roll

YouTube Videos

AAA Senior Driver Expos

NewsRoom Video Gallery

Media: Find and Download AAA Videos and B Roll.