Oil refineries in the U.S. get most of their crude oil from Canada, and after the U.S. slapped a 10% tariff on Canadian oil, industry experts predict gasoline prices would rise. So far, that hasn’t happened. Gasoline prices are falling, with the lowest March gas prices since before the pandemic.
AAA reports the national average price of regular gas is $3.08 a gallon, down two cents in the last week and six cents lower than a month ago. Last year at this time, a gallon of gas averaged 31 cents a gallon more.
So, what’s going on? For starters, the world price of crude oil is falling, thanks to growing supplies from Saudi Arabia. Oil futures markets have been weak lately over growing concerns about the global economy.
In the U.S., 23 states have average prices of regular gas below $3 a gallon. Mississippi has the lowest gas prices in the nation with an average of $2.64 a gallon. California has the most expensive gas in the nation, averaging $4.64 a gallon.
Bucking the seasonal trend
Normally, gasoline prices begin to rise at this time of year. Refineries reduce output so they can perform seasonal maintenance. In another few weeks they will switch over to producing summer grades of fuel, which are more expensive.
Even though motorists may be enjoying lower gas prices now, the lower prices may be a sign of economic trouble ahead.
“Concerns about the direction of the economy could have a major influence on fuel prices in the months ahead, especially with the high level of uncertainty surrounding tariffs,” Patrick DeHaan, GasBuddy’s head of Petroleum Analysis wrote on the company’s blog.
“Additionally, OPEC+ announced last week that it would gradually begin restoring oil production after nearly two years of cuts, adding further downward pressure on oil prices. As a result, the typical seasonal rise in gas prices has yet to materialize, and if and when it does, it may be considerably smaller than expected.”