Americans enjoy one refuge from inflation: The cheapest gas prices in years

According to data from the AAA Auto Club, December was the cheapest month for prices at the pump this year. The national average for unleaded gasoline has remained below $3 since Dec. 2, falling to a low of $2.85 per gallon on Monday.

That number has risen slightly since then, approaching $2.86 a gallon on Tuesday — but overall, consumers who hit the road before the Christmas holiday will likely continue to see moderate prices.

As always, some states have cheaper averages than others, due to factors ranging from nearby refinery supplies to local fuel requirements. Hawaii had the highest average of about $4.44 per gallon on Tuesday, per AAA — followed by $4.30 in California and $3.92 in Washington. Meanwhile, Oklahoma had the lowest average at about $2.30 per gallon, followed by nearly $2.42 in both Arkansas and Iowa.

However, nationwide, unleaded gasoline is down more than 18 cents from this time last year, and 21 cents lower than it was a month ago. So far, AAA says the prices seen this month represent the cheapest December for gas prices since 2020, when the COVID-19 pandemic ravaged the economy.

The travel organization notes that this month’s cheapest prices arrive as supply remains strong. Crude oil, the main ingredient in gasoline, was also at a relatively moderate level – with WTI remaining under $60 a barrel through most of December.

The relief at the pump is welcome for consumers who are feeling rising prices in other parts of their budgets — with concerns growing about the costs of goods ranging from groceries to holiday gifts amid persistent inflation and U.S. president Donald Trump’s tariffs on foreign imports.

government data actually showed that consumer prices slowed in November, rising just 2.7% from a year earlier. But year-over-year inflation is still well above the Fed’s 2% target — and economists were quick to warn that last month’s numbers were suspect due to potential delays and distortions from the 43-day federal shutdown.

Most Americans continued to express their anger and frustration over the rising costs of living, as well as the unstable job market. On Tuesday, the Conference Board said its consumer confidence index fell in December to its lowest level since April.