by Washington, D.C. — As millions of Americans prepare for holiday travel, drivers across the United States are getting some financial relief at the pump, with gas prices falling to their lowest December levels in years, according to new data from AAA.
AAA reports that December has been the cheapest month for gas prices so far this year, offering a welcome break for consumers already feeling pressure from higher living costs.
Gas Prices Remain Below $3 Nationwide
The national average price for regular unleaded gasoline has stayed below $3 per gallon since December 2, a milestone many drivers haven’t seen consistently in recent years.
As of Monday, prices dipped to about $2.85 per gallon, the lowest level recorded this month. By Tuesday, the average had inched up slightly to around $2.86 per gallon, though analysts say prices are expected to remain relatively stable through the Christmas holiday.
For travelers hitting the road in the coming days, that means milder fuel costs compared to earlier in the year.
Wide Price Gaps Between States
While the national average remains low, gas prices continue to vary sharply by state due to factors such as refinery access, fuel blend requirements, and transportation costs.
According to AAA data:
- Hawaii had the highest average price at around $4.44 per gallon
- California followed at roughly $4.30 per gallon
- Washington averaged about $3.92 per gallon
On the lower end of the spectrum:
- Oklahoma posted the cheapest average at around $2.30 per gallon
- Arkansas and Iowa followed closely at about $2.42 per gallon
Despite these regional differences, prices in most states remain significantly lower than a year ago.
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Prices Down From Last Year and Last Month
AAA says gas prices are currently:
- More than 18 cents cheaper than this time last year
- About 21 cents lower than one month ago
So far, this month marks the cheapest December for gasoline prices since 2020, when the COVID-19 pandemic sharply reduced travel and demand.
For drivers accustomed to volatile fuel costs, the consistency of recent price declines has been notable.
Strong Supply Keeps Prices in Check
Analysts point to strong fuel supply and moderate crude oil prices as the main reasons for the dip.
Crude oil — the primary ingredient in gasoline — has remained relatively stable, with West Texas Intermediate trading below $60 per barrel for most of December.
AAA notes that steady refinery output and balanced demand have helped prevent sudden spikes at the pump, even as holiday travel increases.
Relief Comes as Other Costs Remain High
Lower gas prices are arriving at a time when many Americans are still grappling with rising costs in other areas, including groceries, housing, and holiday shopping.
Concerns about inflation have remained elevated, particularly as consumers react to trade tariffs and higher import costs under policies tied to Donald Trump.
While fuel savings help, economists say they may not fully offset broader budget pressures.
Inflation Data Sends Mixed Signals
Recent government data showed that consumer prices rose 2.7% in November compared to a year earlier, indicating some cooling. However, inflation remains above the Federal Reserve’s 2% target, and economists caution that the latest figures may be distorted.
Analysts warned that data delays and disruptions tied to a 43-day federal shutdown could have skewed recent inflation readings, making it difficult to assess the true pace of price changes.
Consumer Confidence Continues to Slip
Despite lower gas prices, many Americans remain uneasy about the economy. On Tuesday, the Conference Board reported that its consumer confidence index fell in December, reaching its lowest level since April.
Surveys show persistent frustration over the high cost of living and concerns about job security, suggesting that while cheaper gas is welcome, it hasn’t fully lifted consumer sentiment.
What Drivers Can Expect Next
AAA says gas prices could remain relatively stable into the new year, provided crude oil prices stay moderate and no major supply disruptions occur. Seasonal demand typically drops after the holidays, which could help keep prices in check.
For now, many drivers are taking advantage of the savings — making holiday road trips a bit more affordable than they were just months ago.
Are gas prices lower where you live, or are you still paying above the national average? Share what you’re seeing at the pump in the comments below.
