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Gasoline costs tumble to lowest point since March

Pixabay Photo • Tennesseans saw the lowest gas prices last week since back in early March. Most indicators point to a continuation in falling prices at the pump.

From Staff Reports

Relief at the pumps showed up in dramatic fashion last week. Tennesseans are now welcoming the cheapest prices at the pump since early March according to a release released by AAA on Monday, Aug. 8. 

Gas prices across the state fell nearly 16 cents, on average, over the past week, continuing an eight-week trend of falling pump prices. The Tennessee Gas Price average is now $3.62 which is 81 cents less expensive than one month ago and 73 cents more than one year ago.

“We’re still finding that fewer drivers are filling up, even despite gas prices falling eight weeks in a row,” said Megan Cooper, spokeswoman for AAA – The Auto Club Group. 

“Lower demand for gasoline coupled with oil prices that continue to trend lower are paving the way for plunging prices at the pump,” Cooper added. 

“This week, Tennesseans should expect another week of declining gas prices,” Cooper predicted. “However, it’s worth remembering that the fuel market has proven to be extremely volatile this year, and trends can change rather quickly if something reignites concerns about fuel supplies.”

Quick Facts

  • 72% of Tennessee gas stations have prices above $3.75
  • The lowest 10% of pump prices are $3.25 for regular unleaded
  • The highest 10% of pump prices are $4.03 for regular unleaded
  • Tennessee is the sixth least expensive market in the nation

National Gas Prices

Despite steadily falling gas prices during the peak of the summer driving season, fewer drivers fueled up last week. It’s another sign that, for now, Americans are changing their driving habits to cope with higher pump prices. Meanwhile, the cost of oil has edged lower on fears of economic slowdowns elsewhere around the globe. Because of these factors, the national average for a gallon of gas fell to $4.05.

According to new data from the Energy Information Administration, gas demand dropped from 9.25 million barrels a day to 8.54 million barrels a day last week. The rate is 1.24 million barrels a day lower than last year and is in line with the need at the end of July 2020, when COVID-19 restrictions were in place and fewer drivers hit the road. Moreover, according to EIA, the total domestic gasoline supply rose slightly by 200,000 barrels a day to 225.3 million barrels a day. If gas demand remains low and the supply continues to increase alongside falling oil prices, drivers will likely continue to see pump prices drop.

AAA finds that drivers made significant changes to cope with high pump prices. In a new survey, almost two-thirds of U.S. adults have changed their driving habits or lifestyle since March. The survey shows that drivers’ top two changes to offset high gas prices are driving less and combining errands.

Today’s national average of $4.05 is 67 cents less than a month ago and 87 cents more than a year ago.

National Oil Market Dynamics

At the close of Friday’s formal trading session, WTI increased by 47 cents to settle at $89.01. Although crude prices made slight gains on Friday due to a strong U.S. jobs report for July, they saw significant declines throughout the week as a result of continuing market concern that demand will decline if economic growth stalls or reverses course. Prices have not been this low since mid-February 2022—before Russia invaded Ukraine. Additionally, EIA reported that total domestic crude supply increased by 4.5 million barrels to 426.6 million barrels. The sharp inventory increase, during the usually high-demand summer driving season, signals low demand could continue pushing prices lower. For this week, crude prices could continue to decline if demand concerns persist.

Drivers can find current gas prices along their route using the AAA TripTik Travel planner.