Gas prices in California have dropped below $5 per gallon for the first time since July. This decline follows a national trend, although California’s prices remain the highest in the country. The average cost of regular gasoline in the state is now $4.98 per gallon, down from the peak of $6 in September. Governor Gavin Newsom’s decision to temporarily suspend an anti-smog rule contributed to the initial decrease by allowing the use of cheaper winter-grade fuel, produced from a broader and less expensive range of components.
Despite the decrease, California’s adherence to stricter environmental regulations is keeping gasoline prices more than $1 higher than the national average, which stands at $3.308 per gallon, the lowest since January. National fuel prices have been on a downward trend for 53 consecutive days.
The drop in demand, reaching a 25-year seasonal low in October, and ongoing inflation have led to reduced discretionary driving. Additionally, crude oil futures, which influence pump prices, have decreased by 5% for the year. This decline follows four consecutive weeks of losses, as concerns about supply returned after the Israel-Hamas war premium faded.
The upcoming U.S. Thanksgiving travel period is anticipated to temporarily boost demand. Projections indicate that this year’s Thanksgiving travel is set to be the third-highest on record since 2000. Approximately 49.1 million Americans are expected to hit the roads, marking a 1.7% increase compared to the previous year.
