Ameer Randolph
Fuel prices have been a significant concern for consumers in the United States, with prices reaching record highs in 2022. In December 2022, the retail price for motor gasoline was around $3.50 per gallon, impacting travel behaviours and contributing to inflation. This price reflects a decrease from November 2022 but is significantly higher than pre-pandemic levels. The cost of fuel has had notable effects on consumer behaviours, with many individuals reducing trips or opting for alternative modes of transportation due to the high fuel costs. Additionally, US import fuel prices increased by 19.4% from December 2021 to December 2022, indicating a broader trend of increasing fuel costs.
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What You'll Learn
Fuel prices vary across the US
Fuel prices vary significantly across the United States, with several factors influencing these disparities. Regional differences in taxation, distribution and refining costs, as well as local demand and competition, all contribute to the varying fuel prices seen across the country.
Hawaii and California top the list with the highest prices, while Mississippi and Louisiana offer the cheapest fill-ups. Hawaii's island location and California's coastal position contribute to higher transportation costs and taxes, while Mississippi and Louisiana benefit from their proximity to oil refineries and lower overall taxes.
The availability and utilization of fuel rewards programs offered by gasoline retailers and grocery chains can also impact the effective price of fuel for consumers. For example, Exxon, Shell, and Circle K all offer rewards programs that provide discounts on gas purchases. Similarly, Kroger's fuel points program allows shoppers to earn fuel savings when they spend at Kroger supermarkets.
In addition to regional variations, fuel prices can also differ among gas stations within the same state or city. Gasoline retailers may adjust their prices based on local competition and their proximity to highways or densely populated areas. Furthermore, the use of fuel apps, such as GasBuddy, Waze, and Google Maps, allows drivers to easily compare prices in real time and make informed decisions.
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$23.63 $23.02
Gas prices fell in December 2024
Gas prices in the US fell in December 2024, with retail gasoline prices reaching a yearly low. This decrease was influenced by lower crude oil prices and narrower refinery margins when compared to 2023.
In the week leading up to December 24, prices declined on both the East and West Coasts, with the East Coast region experiencing the most significant drop of almost 5 cents. The Gulf Coast, however, saw an increase of 8 cents. Oklahoma maintained its position as the state with the lowest gas prices, with a gallon of gas costing $2.55. Overall, 30 states had an average price of $2.99 or lower per gallon of gas.
The national average weekly gasoline price for 2024 was $3.01 per gallon, which was 20 cents lower than in 2023. This decrease in gas prices was observed across all regions, with the Rocky Mountains experiencing the most significant drop of 42 cents per gallon.
The cost of diesel fuel also decreased in December 2024, with the national average price dropping by more than 8 cents per gallon. This made diesel fuel 53 cents cheaper than the previous year.
While gas prices generally showed a downward trend in December 2024, there were slight increases in some regions, such as the Midwest, which saw a 4-cent increase in the week leading up to December 24.
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Diesel prices vary by region
In December 2024, diesel prices varied across different regions. According to data from the U.S. Energy Information Administration (EIA), there were slight increases in fuel prices ahead of the holidays.
On December 2, 2024, prices in most regions decreased. A notable shift occurred on the East Coast, with prices falling below $2.99 on average. The Midwest saw an increase of about 4 cents, while 31 states maintained a $2.99 or lower average for a gallon of gas. Oklahoma boasted the cheapest price at $2.49 per gallon.
By December 16, certain regions experienced fluctuations. The Midwest saw an 8-cent increase, while the Gulf and West Coasts witnessed decreases of approximately 4 cents.
In the final week of December, prices continued to vary across regions. The East and West Coasts observed declines, with the East Coast registering the most significant drop of almost 5 cents. Conversely, the Gulf Coast recorded the largest increase of 8 cents. Oklahoma retained its position as the state with the lowest gas price, with a gallon of gas costing $2.55. Overall, 30 states maintained a $2.99 or lower average per gallon.
These regional discrepancies in diesel prices can be attributed to various factors, including supply and demand dynamics, local taxes, and transportation costs. It is advisable for travellers and fleet drivers to stay updated on fuel prices before embarking on journeys, especially when crossing state lines, to optimize their fuel expenses.
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Gas prices are influenced by economic factors
Gas prices are influenced by a multitude of economic factors, which can cause fluctuations in the market. In December 2024, the national average cost of gasoline in the US was $3.00 per gallon, according to the U.S. Energy Information Administration (EIA). This was a slight increase ahead of the holiday season, as families travelled and fleet drivers worked. However, prices did vary across different states and regions. For example, Oklahoma had the lowest price per gallon at $2.49-$2.55, while the Gulf Coast region experienced an increase of 8 cents.
Economic factors such as supply and demand play a significant role in determining gas prices. In 2023, the US consumed approximately 137 billion gallons of gasoline, according to the EIA. This was a notable increase from 2020, when the pandemic caused a 40% drop in gas consumption. The laws of supply and demand state that when demand increases, prices tend to rise, and when demand decreases, prices tend to fall. Therefore, an increase in consumption, as seen in 2023, can lead to higher gas prices.
The production and distribution costs of gasoline also influence its price. These costs include exploration, production, refining, marketing, and distribution expenses incurred by oil companies. Taxes and duties levied on gasoline by governments can also add to the price paid by consumers. For instance, in the US, gas taxes can vary across state lines, causing price differences when filling up in different states.
Additionally, the global economic landscape impacts gas prices. De Haan, an expert in the field, attributed the return to normal gas prices in December 2024 to several economic factors, including the Federal Reserve slowing down the economy with higher interest rates and a weak economy in China, the world's second-largest oil consumer. The COVID-19 pandemic and the Russia-Ukraine war also contributed to imbalances in the gas market.
Moreover, the strength of a country's currency can affect gas prices. A strong currency can lead to lower import costs for oil-importing countries, resulting in lower gas prices for consumers. Conversely, a weak currency can make imports more expensive, potentially driving up gas prices. In the case of the US, its position as the world's largest crude oil producer allows it to maintain comparatively low retail prices for oil products, despite usually higher fuel prices in high-income countries.
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Gas is cheaper in certain US states
Gas prices in the US have been seeing a downward trend, with prices falling in 27 out of 51 states in the week leading up to July 24, 2025. The national average gas price fell from $3.16 per gallon on July 17, 2025, to $3.15 per gallon on July 24, 2025.
As of July 24, 2025, California had the most expensive gas in the US, costing $4.48 per gallon. This was closely followed by Hawaii ($4.47) and Washington ($4.39). In contrast, gas was cheapest in Mississippi ($2.71), Louisiana ($2.77), and Oklahoma ($2.78).
There are several reasons for these discrepancies in gas prices across the US. Firstly, the distance that fuel has to travel from refineries to gas stations impacts the price, with shorter distances resulting in lower costs for consumers. States near refineries, such as Louisiana and Texas, typically benefit from lower gas prices. California, on the other hand, often faces higher gas prices due to its high demand and the time it takes for supplies to arrive from other refineries.
Environmental regulations also play a role in gas price variations. Some states require the use of reformulated gasoline with additives to reduce carbon monoxide, smog, and toxic air pollutants. This type of gasoline is more expensive to refine and can impact the overall price. Federal and state-specific regulations may also mandate different fuel blends for summer and winter, causing temporary supply issues and price hikes.
Taxes and the number of gasoline stations in an area can also influence gas prices. Higher taxes and a lower number of stations often result in higher prices. Additionally, the transportation involved in getting oil from the earth to gas stations incurs significant costs, impacting the final price that consumers pay.
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Frequently asked questions
The cost per gallon of fuel in December 2022 was $3.14, down 5.3% from November 2022.
The fuel cost for US airlines was $4.63 billion in December 2022, down 0.3% from November 2022.
Motor gasoline prices rose by 10% from December 2022 to May 2023.
The retail price for motor gasoline reached an all-time high of $5.03 in June 2022.
Import fuel prices increased by 19.4% from December 2021 to December 2022.
