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July 4 gas prices expected to be lowest since 2021, analysis finds

A release of gasoline from a federal stockpile won't move the price needle for consumers, an expert says.
Gas Price
Posted at 8:43 AM, Jul 03, 2024

Americans are expected to pay less for gasoline to fill up their vehicles this Independence Day. According to GasBuddy, the average gallon of gas this July 4 is expected to be $3.49 per gallon, which is down by 1 cent from a year ago and $1.30 below 2022 prices.

Some states are expected to have significantly lower prices this July 4, including Washington, where gas prices are expected to be 71 cents lower than a year ago. A gallon of gas in Oregon is expected to be on average 60 cents cheaper this year.

Some states, however, will be paying more than a year ago. Ohioans will pay 23 cents more this July 4 than last year. Gas prices in Michigan are expected to be 22 cents higher than on July 4, 2023.

Related story: Energy watchdog predicts 'staggering' oil glut by 2030

Patrick De Haan, head of petroleum analysis at GasBuddy, said with wage hikes over the last two years, gas prices are more affordable for Americans. Average wages have increased 7.9% over the last two years, according to Bureau of Labor Statistics data.

"For the second year in a row, gas prices have remained far more affordable," he said. "And considering rising average hourly wages, it's taking Americans a little bit less work to buy that gallon of gasoline this July Fourth than last year. That's the good news. In fact, it doesn't end there. When it comes to individual states, there are 10 states that are seeing gas prices 25 cents a gallon or more cheaper than July Fourth of last year."

Impact of selling from gas reserve

On Tuesday, the Biden administration announced the release of 1 million barrels of gasoline from the Northeast Gasoline Supply Reserve, a move officials hope will help further bring down the cost of gas and other goods as record numbers of Americans are expected to travel surrounding the July Fourth holiday.

The sale of gas from the reserve was mandated by Congress as officials said the supply is expensive to maintain.

Related story: Biden administration to sell 1 million barrels of gas from reserves to lower prices

"It is not going to be a needle mover for the majority of Americans," De Haan said. "And even those in the Northeast, where this gasoline reserve exists, aren't really going to see much benefit from it, and that's because the price of oil has risen $10 a barrel in the last three weeks. That's really offsetting this relatively small release of a million barrels of gasoline."

Will gas prices rise this summer?

De Haan says gas prices during the summer can be volatile as hurricanes and natural disasters can cause figures to increase.

"We're up about 10 cents a gallon from where we were in early June," he said. "With hurricane season now showing signs of life with Hurricane Beryl, the earliest Category 5 storm on record, it gives us a little bit of anxiety heading into the second half of the summer. There's always the potential that hurricanes could disrupt refineries and that could send gas prices up. So the second half of the summer could be even more volatile at the pump than what we've seen thus far."