Graphic Credit: GasBuddy
What happens when people are forced to stay home and off the roads due to a global health crisis that is impacting every neighborhood across the country? Gas prices drop to their lowest national average since 2016.
The national price for unleaded gas on March 31, 2020 was $1.99 a gallon, the lowest price since 2016. GasBuddy predicts
the national average could dip as low as $1.49 by mid-April, which would be the lowest since 2004, with potentially hundreds of stations pushing their price to 99 cents per gallon for the first time since the early 2000’s. The American Automobile Association
forecasts a national price average hitting $1.75 or less in April.
Both AAA and GasBuddy say the decline is related to Americans staying home to prevent the spread of COVID-19. AAA also points to the crude oil war between Saudi Arabia and Russia.
“AAA expects gas prices to keep dropping as cheap crude combines with the realities of people staying home and less demand for gas,” said Jeanette Casselano, AAA spokesperson. “Today, motorists can find gas for $1.99 or less at 68% of gas stations in the country.”
It’s important to note that COVID-19 is not impacting the availability of gasoline. AAA says the U.S. has an unusual amount of winter-blend gasoline still available for this time of year. This caused the Environmental Protection Agency (EPA) to extend the sale of winter-blend past the May 1 deadline to May 20.
“The EPA’s extension of the winter-blend gasoline waiver will contribute to sustained lower prices, especially as U.S. gasoline demand readings look more like winter-driving season than spring,” added Casselano.
Charting The Price DropCheck out this GasBuddy chart
that shows prices dropping nationwide since February. GasBuddy says the price drops have been so swift and severe that it could take gas stations weeks to fully pass along the lower prices.
According to GasyBuddy, more than half (29) of U.S. states are currently seeing average prices less than $2 per gallon. In the last week, 99 cent prices have shown up at various times in Kentucky, Tennessee, Oklahoma, Wisconsin and Missouri and more could join in the days and weeks ahead. An additional drop of 25-65 cents is possible in most states, while West Coast states including California could see prices drop 50 cents to a dollar per gallon over the next few weeks.
"This is an unprecedented event. We’re experiencing one of the biggest historical collapses in gas prices, including the Great Recession of 2008,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “World demand for oil has plummeted virtually overnight while domestic demand for gasoline continues to fall off a cliff with more states implementing shelter-in-place orders. Prices will continue to fall in the days ahead with currently no end in sight. Motorists need not be in any hurry to fill up, and those who do should be shopping around as prices will continue to race lower. While some lucky Americans may be able to fill for 99 cents per gallon.”
- 2016: According to GasBuddy, the last time the national average has been this low was March 23, 2016, caused by a crash in the oil market. During that period, the national average stayed below $1.99 for nearly three months, from January 2 through March 23, bottoming at $1.66 per gallon on February 14.
- 2009: GasBuddy also notes the Great Recession pushed the national average below $1.99 per gallon for roughly four months from November 20, 2008 to March 25, 2009, bottoming at $1.59 on December 29, 2008. Prices eventually staged a major recovery in 2010 and stayed high until 2014.