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03/28/2022

Fuel Prices Remain Stable as Demand Decreases

The drop in demand is offset by steadily rising crude oil prices.
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gas pump

WASHINGTON, D.C. — The declining price of crude oil has slowed, keeping prices at the pump fairly steady weeks after Russia's invasion of Ukraine prompted prices to spike across the global oil market.

As the cost of a barrel of oil hovers around $110, the U.S. national average for a gallon of regular gasoline reached $4.24 as of March 28. This is down from the high of $4.33 on March 11, but only a penny less than the previous week.

At the same time, domestic gasoline demand continues to defy seasonal trends, falling for the second week in a row. This could be due to both higher pump prices and consumers altering their driving habits, AAA reported.

"The global oil market reflects the volatility caused by the war in Ukraine grinding onward," said Andrew Gross, AAA spokesperson. "And with oil prices refusing to fall, the price at the pump is likewise meeting resistance at dropping further."

The national average rose to levels not seen in nearly a decade and a half in early March, reaching the highest point since July 2008, as Convenience Store News reported.

Many drivers have likely already reached a tipping point in terms of changing their behavior. Data from a recent AAA survey shows that nearly six in 10 Americans (59 percent) said they would make changes to their driving habits or lifestyle if the cost of gas rose to $4 per gallon. If gas were to reach $5 per gallon, three-quarters of respondents said they would need to adjust their lifestyle to offset the spike at the pump.

Recent data from the U.S. Energy Information Administration shows that total domestic gasoline stocks fell by 3 million barrels to 238 million barrels last week, while gas demand also fell from 8.94 million barrels per day to 8.63 million barrels per day. This decrease in gas demand is contributing to price decreases at the pump. However, the decline is being slowed by the steady increase in the price of oil.

If crude oil prices continue to rise, pump prices will likely follow, reversing the current downward trend, according to AAA.

At $4.24 per gallon, the current national average is one cent less than a week ago, 63 cents more than a month ago and $1.38 more than a year ago.

The top 10 largest weekly changes occurred in Georgia (−17 cents per gallon), Nevada (+13 cents), Utah (+9 cents), Montana (+8 cents), Arizona (+8 cents), Wyoming (+8 cents), Delaware (+7 cents), Washington, D.C. (+7 cents), Idaho (+6 cents) and California (+6 cents).

The current top 10 least expensive markets in the nation are Missouri ($3.78 per gallon), Kansas ($3.80), Oklahoma ($3.81), Arkansas ($3.82), Maryland ($3.82), Nebraska ($3.87), Texas ($3.87), Iowa ($3.88), North Dakota ($3.91) and Mississippi ($3.91).

Multiple states have taken action to give drivers relief. Maryland Gov. Larry Hogan signed emergency bipartisan legislation to immediately suspend the state's gas tax for 30 days, while Georgia Gov. Brian P. Kemp signed HB 304 on March 18 to temporarily suspend the state's excise tax on motor fuel sales. The law will remain in effect through May 31. Other governors and legislative leaders have also explored possible methods to ease pump pain, and the White House is considering authorization of year-round E15 sales "in a menu of options."