Gasoline pump prices have dropped by 11 cents a gallon over the last 16 days according to AAA, closing the month of July at a national average of $2.66 a gallon, the lowest average July price since 2009. AAA notes that at that pace August prices could drop another 15 cents and that the price could drop to around $2.00 a gallon by winter.
The monthly average for July was $2.75 a gallon, the lowest average for the month since 2010. A 21% drop in crude oil prices during the month is the primary reason for the decline in pump prices. Pump prices for 2015 peaked in mid-June at a national average of $2.80.
Demand has been strong from drivers who are hitting the road during the summer driving season. AAA noted:
Lower gas prices and a growing economy have helped motivate people to drive more this year. Americans drove 275.1 billion miles in May, which was the highest monthly total on record, according to the most recent report by the Federal Highway Administration. It is likely that driving has continued to increase this summer as Americans take long road trips.
The $12 per barrel decline in the price of crude oil in July should translate into a gasoline price drop of about 29 cents per gallon according to AAA. That indicates a further drop of about 15 cents is in the cards for August if prices just remain stable and there’s no disruption to refinery output.
The five states with the most expensive gasoline are California ($3.79 a gallon), Alaska ($3.48), Hawaii ($3.29), Nevada ($325, and Washington ($3.18).
The five states with the cheapest gasoline are South Carolina ($2.29), Alabama ($2.29), Mississippi $(2.33), Ohio ($2.36), and Indiana ($2.37).
The most common price in the country is $2.499, down from $3.399 a year ago.