A global crude oil price war and lower demand has caused the national average price for a gallon of gasoline to drop below $2 for the first time in four years, according to AAA.
AAA reported March 31 the national average price was $1.99 and expected the national average to drop further to $1.75 or less in the coming days. Indiana’s average price was $1.71 on March 31.
AAA said the decline is due to COVID-19’s effect on the global economy and the crude oil price war between Saudi Arabia and Russia. Crude has plummeted to $20 per barrel – a closing price not seen since 2002.
For the last 52 weeks, West Texas Intermediate crude oil has averaged $56 per barrel with the national pump price average at $2.63.
“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.”
Across the country, state averages are less than $3 per gallon except in Hawaii ($3.36) and California ($3.05). Today, twenty-nine states have regular gas price averages under $2, with Oklahoma ($1.55) having the cheapest in the country.
While demand is diminishing, COVID-19 is not impacting the U.S. gasoline supply. The U.S. has an unusual amount of winter-blend gasoline still available for this time of year, AAA said.
This caused the Environmental Protection Agency to extend the sale of winter-blend past the May 1 deadline to May 20, AAA said. The agency said it would continue to monitor and may extend the waiver again.
AAA forecasts that until crude oil prices and gasoline demand increase, cheaper gas prices will remain for the foreseeable future.
