Gas prices drop heading into the new year

After a year in which drivers paid some of the highest prices on record at the gas pump, the holidays bring some relief as prices drop ahead of another busy travel season.

The average cost of a gallon of gasoline in California is $4.34, according to the American Automobile Assn. That’s a drop of around 80 cents from a month ago and about 30 cents from a year ago.

Roughly 112 million people are expected to travel from Friday through Jan. 3, according to AAA. About 101 million will travel by car, 7.2 million by air and 3.7 million via other modes including bus, train and cruise ship.

Gas prices across the country have dramatically dipped in the last month, mainly due to a holiday lull, according to Doug Shupe, corporate communications manager with the Auto Club of Southern California. Heading into December, a gallon of regular gasoline was at its lowest average price point for the year, according to AAA.

Fewer people were driving and filling up their cars after the Thanksgiving break, Shupe said, and with the lack of demand, gas prices tumbled.

Other factors also helped push the price down at the pump. Local oil refineries that were closed earlier this year due to maintenance issues have since come back on line; crude oil prices dropped below $75 a barrel heading into November; and there was an increase in the nation’s domestic gasoline stockpile, among other factors, according to AAA.

But there are signs gas prices will jump back up as more people fuel up for winter holiday travel.

“The price decrease we saw over the last month has severely slowed down. It’s not exactly clear how long these lower prices will stick around,” Shupe said. “The real question is, how will the markets respond after January.”

More than 8 million people will travel from Southern California by car, a slight increase from last year and about on par with 2019’s holiday travel rush. Las Vegas, San Diego and Mexico are some of the top travel destinations for people in Southern California this season.

The average price of gas in the Los Angeles and Long Beach area is $4.42 a gallon, nearly the same price from the day before. A week ago, the price was $4.51, and a month ago it was $5.21, according to AAA’s gas price tracker. Los Angeles and the rest of the nation saw three historic spikes at the gas pump in 2022, increases that were connected to a volatile global market and the Russian invasion of Ukraine, according to analysts.

Across the country, there are about 20 states where the average price is below $3 a gallon.

It’s unclear what effect current winter storms will have on gas prices heading into the new year.

“We’ll just have to wait and see how that plays out next week,” Shupe said.

AAA reminds drivers the best way to save fuel is to keep their vehicles properly maintained, keep tires fully inflated and avoid hauling any unnecessary cargo, like summer sports equipment. They also recommend drivers download a gas tracking app to find the lowest prices in their neighborhood, rather than drive around in search of lower prices.

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