Ameer Randolph
The price of a gallon of gas is a topic that impacts the wallets of people worldwide. Gas prices are intrinsically linked to the overall economy, with oil gluts, crises, inflation, and recessions all playing a role in price fluctuations. In 2022, various factors, including inflation, post-pandemic recovery, and geopolitical conflicts, led to a dramatic increase in gas prices, affecting not just drivers but also the cost of goods due to increased transportation costs. With historical context, we can see the impact of economic events on gas prices, such as the energy crisis of the 1970s, the 2008 recession, and the steady decline since 2022. Understanding these factors helps us grasp the dynamic nature of gas pricing and its broader implications.
| Characteristics | Values |
|---|---|
| Average price of a gallon of gas in 2022 | $4.90 |
| Average price of a gallon of gas in July 2025 | $3.15 |
| Average price of a gallon of gas one year before July 2025 | $3.51 |
| States with the highest gas prices in July 2025 | California and Hawaii |
| States with the lowest gas prices in July 2025 | Mississippi and Texas |
| Cheapest day of the week to buy gas | Monday |
| Most expensive days of the week to buy gas | Friday and Saturday |
| Gas app with complementary rewards programs | GasBuddy |
| GasBuddy savings | 25 cents per gallon |
| Year with the highest gas prices in about 40 years | 2022 |
| Average price of a gallon of gas in 1970 | $0.36 |
| Average price of a gallon of gas in 1980 | $1.19 |
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What You'll Learn
Gas prices in 2022
Gas prices in the US have fluctuated over the years, and 2022 was no exception. The year saw some of the most expensive national average prices since 2018, with the highest weekly gas price reaching $4.99 per gallon in mid-June. This was the highest weekly national average since 2018, and Californians paid even more, with prices in the state reaching $6.43 per gallon. These prices were influenced by various factors, including the war in Ukraine, which limited supply, and the resulting economic sanctions imposed on Russia, a major trade partner for US petroleum imports.
The national average for a gallon of gas in April was about $4.08, according to AAA, and prices briefly topped $6 in some parts of the country. Californians continued to pay the highest average gas prices at $5.73, while Missouri had the lowest at $3.65 per gallon. The high prices put a strain on consumers, and some states implemented measures to try to ease the burden. However, with the summer driving season approaching, it was unlikely that Americans would see a significant relief in gas prices.
The high gas prices in 2022 also impacted credit card usage at gas stations. To keep up with the rising fuel costs, credit card networks raised their hold limits from $125 to $175 in 2022. This meant that gas stations could place a temporary hold on a customer's card for up to $175 until the final purchase amount was charged. The increase in hold limits reflected the record-high gas prices in the US during that year.
Looking at the broader context, the US gas prices in 2022 were significantly lower than in many other countries. For example, customers in Norway paid around $8.10 per gallon, almost double the US price. However, compared to previous years, 2022 stood out as a year of expensive gas in the US. In 2020, for instance, the US saw the lowest annual average gas price of $2.19 per gallon due to the pandemic-induced drop in gas consumption.
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Gas prices in the 1970s
In 1970, the average price of gas was $0.36 per gallon, which, adjusted for inflation, would be around $2.70 per gallon in today's money. This price remained relatively stable until the early 1970s when the United States faced a reliance on imported oil, technological advancements increased oil and gasoline consumption, and domestic oil production declined. These factors led to the oil crisis, which began in 1973 and continued into 1974, causing gas prices to skyrocket.
The oil crisis was triggered by the Organization of Arab Petroleum-Exporting Countries (OAPEC), which disrupted the market by increasing prices from $3 to $12 per barrel. This had a direct impact on consumers, who experienced long lines at gas stations and restrictions on filling up their vehicles on certain days. The energy crisis of the 1970s is often cited as one of the most impactful events on the oil economy.
By 1975, the public had endured two years of early morning waits for gasoline, and gas prices continued to rise. The average gas price in 1975 was around $0.57 per gallon, which, when adjusted for inflation, is equivalent to $3.37 per gallon. The calculations show that driving in the 1970s was more expensive per mile than in later years, despite the lower gas prices, due to lower fuel efficiency in vehicles.
Towards the end of the decade, in 1980, the average gas price had reached $1.19 per gallon, which is approximately $4.25 per gallon when adjusted for inflation. This price increase was influenced by the U.S. embargo of oil from Iran in the early 1980s, with prices peaking in 1982.
Overall, the 1970s were a period of fluctuating gas prices, with the energy crisis and economic factors playing a significant role in the increases experienced by consumers. While gas prices have climbed to record highs in recent years, the impact of the 1970s energy crisis and the subsequent adjustments in mileage and wages remain notable events in the history of gas pricing in the United States.
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Factors influencing gas prices
The price of gasoline is influenced by various factors, including the cost of crude oil, supply and demand, local market conditions, taxes, and the octane level of the fuel. Here are some detailed explanations of how these factors impact gasoline prices:
Crude Oil Prices
Crude oil is the raw material used to make gasoline, so its price significantly affects gasoline prices. Between 2014 and 2023, the price of crude oil accounted for an average of 52.3% of the price of gasoline. However, this percentage can vary, as seen during the COVID-19 pandemic in 2020 when crude oil prices dropped sharply, accounting for only 43% of gasoline costs. Geopolitical events, such as the Russian invasion of Ukraine in 2022, can also impact crude oil prices and, subsequently, gasoline prices.
Supply and Demand
The laws of supply and demand play a crucial role in determining gasoline prices. When demand for gasoline is high, prices tend to rise, and when demand is low, prices may fall. Seasonal changes in demand, such as increased summer travel, can impact prices. Additionally, refining capacity and exports can affect the supply of gasoline available in the market, influencing prices.
Local Market Conditions
The price of gasoline can vary across different locations due to local market conditions. The fueling location, competition among nearby gas stations, and the marketing strategy of the owner can all impact the price at the pump. Operational costs, including wages, rent, and supply sources, can also vary between stations, leading to differences in prices even within close proximity.
Taxes
Federal, state, and local taxes contribute to the retail price of gasoline. As of July 1, 2024, the federal tax on gasoline was $0.184 per gallon, while state taxes and fees averaged $0.3244 per gallon in 2024. Sales taxes and local government taxes can further impact the price of gasoline, varying across different regions.
Octane Level
Gasoline with a higher octane level has a higher resistance to combustion and is less prone to engine knocking. Refiners charge more for higher-octane fuel, with premium-grade gasoline being the most expensive. The price difference between regular and premium-grade gasoline has generally increased over time.
These factors collectively influence the price of gasoline and can vary over time and across different regions. The interplay between these factors determines the cost of gasoline for consumers.
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Regional price differences
West Coast states, such as California and Hawaii, typically have the highest gas prices in the country. California, in particular, has been known to top the list for the most expensive gas prices. This can be attributed to various factors, including higher taxes and the unique blend of gasoline required in the state, which is more expensive to produce. Additionally, California's strict environmental regulations and emissions standards contribute to the higher prices at the pump.
In contrast, southern and midwestern states often enjoy more affordable gas prices. Mississippi and Texas, for example, are known for offering cheaper fill-ups compared to the national average. This can be partly explained by their proximity to oil refineries and their lower taxes. Texas, being a top oil-producing state, benefits from a robust supply of gasoline, which helps keep prices competitive.
It is worth noting that gas prices fluctuate over time due to various economic and geopolitical factors. For instance, the COVID-19 pandemic, inflation, and the Russia-Ukraine conflict have all contributed to recent surges in gas prices. Additionally, seasonal variations and changes in demand can also impact regional price differences.
To maximize savings, drivers can take advantage of rewards programs offered by gas stations and grocery chains. Additionally, filling up on Mondays is generally cheaper, while Fridays and Saturdays tend to be the most expensive days. Planning road trips with knowledge of regional price variations can also help travelers avoid overpaying for gas.
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Saving money at the pump
The price of gasoline has been surging in recent times, and it can be challenging to keep up with the rising costs. Here are some ways to save money at the pump:
Choose fuel-efficient cars
If you are in the market for a new car, consider buying a hybrid or electric vehicle. These cars are designed to be more fuel-efficient, which can help you save money on gas in the long run.
Reduce car trips
A simple way to save money at the pump is to drive less. Consider walking or taking public transportation whenever possible. If you must drive, try to bundle your errands and appointments so you don't have to make multiple trips. Reducing your overall mileage will help you save on fuel costs.
Maintain proper tire inflation
Keeping your tires properly inflated is important for fuel efficiency. Underinflated tires can lower your gas mileage and cost you more at the pump. Ensure your tires are inflated to the recommended pressure to optimize your fuel economy.
Choose the right gasoline
Higher-octane or premium gasoline is not necessary for most cars and can be more expensive. Unless your car manufacturer specifically requires premium fuel, stick to regular-grade gasoline to save money.
Use rewards programs
Many gas stations and grocery stores offer rewards programs that can help you save on gas. Sign up for these programs to earn points or discounts, and take advantage of promotions and coupons to maximize your savings.
Compare prices
Prices at the pump can vary by region and gas station. Use apps like GasBuddy, Fuel Finder, or Google Maps to compare fuel prices and find the best deals. Filling up at stations that are not located on major highways may also offer better prices.
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Frequently asked questions
$0.36.
$2.70.
$1.19.
$4.25.
$4.90.
