2023 Gas Prices and Trends

Drivers are receiving a nice gift just before the holidays. The price of gasoline has fallen to its lowest level this year after dropping every day for the last two months.

AAA’s national average price of regular gas is $3.24 a gallon, 26 cents cheaper than a month ago and 30 cents less than last year at this time. But that’s just the average. There are plenty of places where you can find cheaper fuel.

“GasBuddy now counts over 20,000 stations that are selling gasoline at $2.75 per gallon or less,” GasBuddy’s head of Petroleum Analysis, Patrick DeHaan, posted on X.

For example, the statewide average price of regular in Texas has fallen to $2.71 a gallon. The average price in Mississippi is $2.76 and $2.78 in Georgia. Eleven other states have average gas prices below $3 a gallon.

Gas remains expensive in a handful of states. California’s average price of regular is $4.88 a gallon, but a month ago it was $5.30 a gallon. The average price is $4.72 in Hawaii and $4.38 in Washington. Again, gas prices are much lower than they were a month ago.

Falling demand

One reason prices are falling is motorists are driving less. Data from the Energy Information Administration (EIA) show gas demand decreased from 9.49 to 8.95 million barrels a day recently.

Another reason for drivers’ good fortune is the decline in oil prices. World oil prices are near their lowest levels of the year, lowering costs for refiners, who have begun producing cheaper winter grades of gasoline.

But it’s not clear if oil prices will remain low for long. Goldman Sachs says it expects an extension of the unilateral production cuts by Saudi Arabia and Russia to last through the first quarter of next year and could even cut more deeply.

The price of gasoline is tumbling and you can credit the bond market. As the yield on U.S. Treasury bonds has risen in recent days, gas prices have fallen.

In a post on X, Patrick DeHaan, head of Petroleum Analysis at GasBuddy, notes the connection.

“The surging cost of borrowing and bonds are pushing oil off a cliff… and that’s good news if you’re a fan of falling #gasprices with RBOB (Reformulated Blendstock for Oxygenated Blending) down a staggering 16c/gal!” he wrote.

DeHaan notes that the price is falling, even though GasBuddy data for the first part of the week indicates U.S. gasoline demand is up 2.8% from the previous week.

Rising interest rates on government bonds are seen as an indicator that the economy may slow and reduce demand for oil. As oil prices fall, so do prices at the pump.

AAA reports the national average price of regular gas is $3.74 a gallon, nine cents a gallon less than seven days ago and six cents less than a month ago. A number of states have seen prices fall even more.

The 10 states where gas prices have fallen the most

Despite the big one-week drop, California still has the most expensive gas in the nation. Georgia has the cheapest.

Motorists are beginning to feel a little more pain at the pump as gasoline prices, stable for the last few weeks, have moved higher over the last few days.

AAA reports the national average price of regular gas is $3.88 a gallon. That’s about four cents a gallon higher than a week ago but is about the same price motorists were paying a month ago. But compared to this time last year, the average price is 20 cents a gallon more.

The average price of premium gas is $4.65 a gallon and the average price of diesel fuel is $4.58 a gallon. The prices of both have risen more than 10 cents a gallon in the last seven days.

Across the country, there is a wide disparity in price on a state-by-state basis. In California, the statewide average price of regular is $5.76 a gallon, the highest in the nation. In Los Angeles, the average price is even higher – $6.03 a gallon.

Mississippi has the cheapest gas in the nation. The statewide average is $3.30 a gallon.

Prices are rising because the price of oil has begun to rise, hitting $90 a barrel. Saudi Arabia and Russia have agreed to curtail production in an effort to keep prices elevated.

Domestic producers have upped their game

Patrick DeHaan, head of Petroleum Analysis at GasBuddy, has reported U.S. production has increased in an effort to make up for lost supply. He reports U.S. oil production is up 800,000 barrels a day from this time a year ago. Since January 2021, U.S. producers have increased their output by 1.9 million barrels a day.

That, and a couple of other factors, may put a ceiling on how high gasoline prices will rise.

 “Oil costs are putting upward pressure on pump prices, but the rise is tempered by much lower demand,” said Andrew Gross, AAA’s spokesperson. “The slide in people fueling up is typical, with schools back in session, the days getting shorter, and the weather less pleasant. But the usual decline in pump prices is being stymied for now by these high oil costs.” 

Other relief may come from refiners. Gasoline producers have begun the process of switching over to winter-grade fuel blends, which cost less than summer-grade fuel.

Motorists are beginning to feel that familiar pain at the pump again. It may not be as bad as early 2022 but the average price of regular gas appears headed toward $4 a gallon.

Currently, AAA reports the national average price of regular is $3.86 a gallon, about three cents more than seven days ago but nearly 30 cents higher than a month ago. The average price of premium gas is $4.60 a gallon while the average price of diesel fuel is $4.31 a gallon.

“We appear to be at a fork in the road when it comes to which direction gas prices will take – up or down,” said Andrew Gross, AAA’s spokesperson.

“The summer heat that kept people home and suppressed refinery production has eased for now, so we have to look at the cost of oil to determine if the recent price climb is ending. More expensive oil will likely lead to higher prices, so stay tuned.” 

Patrick DeHaan, head of Petroleum Analysis at GasBuddy, said on Twitter that at this rate, prices could soon exceed the year-ago price of $3.95 a gallon. He adds that the weather in the Gulf of Mexico has been calm so far this summer, benefiting refinery operations, but that could change.

In addition to weather, demand could also raise gas prices if consumers drive more heading into fall. Government sources report gasoline demand is rising while total gasoline supplies are falling.

As a result, several states have already exceeded $4 a gallon for regular while California and Washington state already have average prices over $5 a gallon.

Here are the states with the most expensive regular gasoline:

• California     $5.16
• Washington  $5.03
• Hawaii         $4.78
• Oregon         $4.69
• Alaska          $4.49

Here are the states with the cheapest regular gasoline:

• Mississippi    $3.32
• Louisiana      $3.43
• Tennessee    $3.43
• Texas            $3.45
• Arkansas      $3.48

For consumers weary of inflation, gasoline prices have been one area of the budget that has seen a little relief in 2023. That may be about to change.

Patrick DeHaan, head of Petroleum Analysis at GasBuddy, took to Twitter this week to report some sudden and significant moves in prices, with some states seeing larger increases than others.

DeHaan said 20 states have seen average gas prices rise by over 10 cents a gallon compared to a week ago. Here are some of the biggest moves:

• Iowa +20 cents
• Texas +18 cents
• Georgia +16 cents
• Indiana + 16 cents
• Florida +16 cents
• Tennessee +16 cents
• North Carolina +15 cents
• Kansas +14 cents
• South Carolina +14 cents
• Minnesota +14 cents

DeHaan says some stations in some of these states have seen prices rise 25 cents to 50 cents a gallon – and they’re still going up.

"On our current trajectory, it seems the national average could rise to $3.85/gal, and we could even get close to $4/gal on the first potential of a storm aiming for the Gulf," DeHaan tweeted.

Prices are still lower than a year ago

According to AAA, the national average price of regular gasoline is $3.73 a gallon, about 15 cents a gallon more than a week ago. But compared to a year ago, prices are relatively cheap. A year ago the national average was $4.28 a gallon.

Why are gasoline prices suddenly going up? One reason is the price of oil. A barrel of oil now costs between $70 and $80. The war in Ukraine continues to play a role in the oil market, with recent fighting damaging a major port facility.

The extreme heat, both in the U.S. and in Europe, may also be a factor. Because of sweltering temperatures, refineries have been forced to curtail operations, reducing output.

And then there’s OPEC, which has teamed with Russia to cut oil production in an effort to keep prices elevated.

Motorists hitting the road this Memorial Day weekend are likely to find a lot of traffic but gas prices that are easier on the wallet than a year ago.

AAA reports the national average price of regular gas is now $3.56 a gallon. Heading into last Memorial Day weekend the price was a dollar more.

In fact, gas prices have remained fairly stable over the last couple of weeks, in part because of concerns about a possible U.S. default, an event that would likely hasten a recession. Oil prices have actually fallen and demand for fuel has decreased.

“Despite mild weather and a less volatile economic forecast, drivers are not hitting the road and raising gasoline demand to traditional seasonal levels,” said Andrew Gross, AAA’s spokesperson. “It’s possible this is merely the lull before Memorial Day, but it could be a trend that lingers into summer. Stay tuned.” 

But demand could accelerate into the weekend. In its holiday forecast, AAA said it expects 42.3 million Americans to travel at least 50 miles from home this weekend. That would be a 7% increase over last year and the third busiest Memorial Day weekend since 2000.

Patrick DeHaan, head of Petroleum Analysis at GasBuddy, has already noted gas price hikes in a handful of states, including Michigan, Ohio and the Chicago area.

Inching up before Memorial Day

“We'll likely see the national average price of gasoline inching up just in time for Memorial Day,” DeHaan wrote on Twitter. “We projected $3.53/gal, could be that or a penny or two higher. Most of the country will see #gasprices inching up between now and the holiday.”

Weekend travelers driving through Mississippi will find the nation’s lowest gas prices, with a statewide average of $2.98 a gallon. Driving across Texas won’t break the bank either with the average gas price $3.08 a gallon.

Consumers who drive through California will feel the most pain at the pump. The statewide average gas price is $4.80 a gallon. Idaho is not far behind with an average gas price of $4.77 a gallon.

The Memorial Day weekend and the start of the summer driving season are still less than two months away but gasoline prices are already on the move.

AAA reports the national average price of regular is $3.50 a gallon, about seven cents a gallon more than a week ago. Compared to a month ago, the average price is about 11 cents a gallon higher.

“Oil prices finally crested and have now settled above the $70 per barrel mark after weeks of hovering just below it,” said Andrew Gross, a AAA spokesperson, “and gas demand is very robust. These two factors will cause drivers to see prices increase for now.”  

In fact, oil prices are starting the week well above $75 a barrel after OPEC announced a production cut over the weekend. Motorists are also driving more as the temperatures begin to warm up. 

The Energy Information Administration (EIA) reported a sizable increase in gasoline demand in late March and its effect is beginning to be felt across the U.S. As a result, gasoline stockpiles declined last week.

Oil supplies have fallen

Last week Patrick DeHaan, head of petroleum analysis at GasBuddy, reported that crude oil inventories fell by 7.5 million barrels (MMbbl) to a total of 473.7 MMbbl. However, even with the decline, DeHaan points out that oil supplies are more plentiful than last year when fuel prices were much higher.

Drivers in Mississippi are enjoying the nation’s lowest gas prices, paying an average of $3.02 a gallon. Oklahoma and Arkansas both have average gas prices of $3.09.

Most of the pain at the pump is on the West Coast. The average gas price in California is $4.82 a gallon. It’s $4.30 in Washington and $4.29 a gallon in Arizona.

After a nice decline in December that gave motorists a much-needed break, gasoline prices rose sharply in January.

The national average price of regular gas is around $3.48 a gallon. A month ago, motorists paid only $3.21 a gallon. The rise has led to fears that fuel prices would resume their march to the all-time highs recorded in June.

But one industry expert says the increase may be over, at least for the moment. Posting on Twitter, Patrick DeHaan, head of Petroleum Analysis at GasBuddy, says the increases have slowed.

“The national average (is) now 1.1 cents higher than a week ago at $3.48/gal,” DeHaan wrote. “With oil, gasoline and distillate values sagging, we may soon see week-on-week drops in average prices.”

Hawaii has the most expensive gasoline in the U.S., with its average price of regular at $4.93 a gallon. However, that’s down from a month ago when the average price was over $5 a gallon.

California still has the second-most-expensive regular gas, with a statewide average of $4.57 a gallon. Its price is also higher than a month ago, the opposite of the nationwide trend.

Texas has the cheapest prices

Texas has the cheapest gasoline this week. The statewide average price of regular is $3.12 a gallon. That’s 27 cents higher than a month ago. While the increase in fuel prices may be slowing, the effects may be temporary. 

“January’s weather was relatively mild in much of the nation, which led to more drivers hitting the road. However, a return of wintery conditions in February may see a revival of seasonal driving patterns,” said Andrew Gross, AAA spokesperson. “But with the cost of oil stubbornly hovering around $80 per barrel, drivers probably won’t catch a big break at the pump over the next week or two.”

Late winter and early spring are typically the time when refineries begin maintenance, which reduces fuel production. Assuming demand remains consistent, that can prevent prices from falling and even send them higher.

Spring is also the time when refineries begin producing summer blends of gasoline, which are more expensive – a fact that will probably confront consumers at the gas pump.

In the typical consumer’s world, most don’t think twice about gas stations and convenience stores that sell fuel being one of their cornerstones. But the number of places where Americans gas up is quadruple the number of supermarkets and more than triple the number of drug stores. 

Gas stations are completely different businesses than they were 50 years ago, when customers expected an attendant to check the oil and clean the windshield. Today, these businesses have become so integrated into a consumer’s life that they have proven to be more than just a gas station, but a one-stop, grab-and-go staple.

And Americans have their faves when it comes to these stops, too, as PaylessPower recently found it. In a survey of 1,011 Americans' opinions of 25 different brands, researchers found what’s driving this phenomenon and how faithful consumers are to their favorite fuel stops. 

The “premium grade” vs. the oil slicks

Coming in as the favorite choice to gas up was Costco. Sure, it may require a membership, but paying that doesn’t seem to make a difference.

“With locations in almost every state, Costco offers familiarity and consistency, not to mention the convenience of getting your groceries, furniture, and gas all in one place,” the researchers said. 

In the second through fifth places are Buc-ee’s, Sam’s Club, Wawa and Sheetz. The overall worst rated were Valero, Sunoco, Texaco, Phillips 66, and Citco – mostly stops where the winners outshine those locations when it comes to all the bells and whistles a convenience store concept can pile on.

Costco also won the price segment as the “cheapest” putting Shell to shame as the “most expensive.” 

The survey found that while price is important, it’s not everything. Only 16% of respondents chose their gas station based on the price and said that they are willing to spend money if they’re happy with the experience. Case in point, Wawa, which pulls the most money out of a consumer’s pocket per visit at $84.66.

“Steadfast station supporters will drive significantly out of their way to patronize their preferred station and happily part with a considerable amount of money once there,” the analysts wrote.

As far as loyalty goes for gas station customers who frequent their favorite station at least twice weekly to fill their tank or pop in for a snack, the analysts found Gulf fans to be the most loyal, visiting three times per week on average. Gulf customers were also the most consistent, with 73% of them always choosing Gulf over others.

Cleanliness and customer service are king

When it comes to having the “cleanest” perception in a consumer’s mind, Costco takes the top spot there, too, followed by Sam’s Club. But if you want to take those two out of the mix because they’re membership-driven, then it’s Buc-ee’s, Wawa, and Sheetz. 

As far as customer service goes, the survey respondents considered Buc-ee’s to be the “nicest.” Costco, Wawa, and Sam’s also did well in that segment, but it was also a category where one of the smaller competitors – Casey’s – shone with 82% of those surveyed saying it was the nicest. 

The analysts said that in the final analysis, Valero was voted in as the “meanest.”