Gas prices see first significant fall since January

A motorist fills up at a gas station. Photo from AAA SD.

SIOUX FALLS, S.D. (KELO.com) — After hitting a record $4.33 on March 11, the national average for a gallon of gasoline has fallen to $4.25, down seven cents in just the past week – the largest weekly drop since January.

Better yet, South Dakota has the 12th lowest average gas price in the nation — $3.92/gallon for regular unleaded – after falling four cents over the past week.

According to Gasbuddy.com, gasoline prices Monday in Sioux Falls ranged from $3.66/gallon to $3.79 or more.

The primary reason for the drop in gas prices is the falling price of crude oil. Crude peaked shortly after Russia launched its war in Ukraine, but has since fallen more than $20, hovering near $105/bbl. Another factor domestically may also be a slight drop in demand. Demand is defying what is typically an upward trend at this time of year, dipping slightly on the week, perhaps because of higher prices at the pump.

“With warmer weather and longer days, we typically see an uptick in gasoline demand at this time of year but last week we saw a drop in demand instead,” said Shawn Steward, AAA South Dakota spokesman. “In a recent AAA survey, 59% of drivers said they would change their driving habits or lifestyle if the cost of gas hit $4 per gallon, so the slight decrease makes sense.”

While this is great news for motorists, there is no guarantee, at this moment that the worst is behind us.

“There is no telling, at this point, whether this downward trend will continue, or for how long, because of the unpredictable nature of the war in Ukraine and other geo-political influences,” Steward added. “But, for the moment anyway, there is hope that the worst is behind us.”

Perspective:

• South Dakota’s average gas price is 33 cents below the national average, ranking the Mount Rushmore State as the 12th lowest gas prices in the nation.
• South Dakota‘s average gas price fell 4 cents in the past week. Today’s state average price is 55 cents higher than a month ago and $1.07 higher than one year ago.
• At $4.25, the national average decreased by 7 cents in the past week but is still 72 cents higher than one month ago.
• National Extremes:
  • High – California – $5.85/gallon
  • Low – Kansas – $3.76/gallon
• According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks fell by 3.6 million bbl to 241 million bbl last week. Gasoline demand also decreased slightly from 8.96 million b/d to 8.94 million b/d. The drop in gas demand is contributing to price decreases, but the recent reversal in oil prices is creating downward pressure on pump prices. If the oil price continues to decline, pump prices will likely follow suit. However, should oil prices start to climb again, pump prices will likely follow.

What Can Drivers Do?

There are things drivers can do to increase gas mileage and help save a little money when they go to fill up their tanks:

• Shop around for the best prices. Drivers can use tools such as the free AAA mobile app to find and compare current gas prices closest to their location.
• Take advantage of gas discounts, sometimes offered by fuel retailers and grocery store chains
• Make sure your car is tuned up and air filters are clean
• Properly inflate your tires
• Stick to the speed limit and avoid fast, jackrabbit starts
• Remove excess cargo weight or external luggage carriers or racks, all of which can lower gas mileage
• Only use more expensive premium gasoline if your vehicle specifically requires it. Otherwise, less expensive regular 87 octane unleaded is fine for most cars. Be sure to check your owner’s manual.

Oil Market Dynamics:

• At the close of Friday’s formal trading session, WTI increased by $1.72 to settle at $104.70. After crude prices spiked in response to Russia’s invasion of Ukraine, crude prices changed course in reaction to China announcing new lockdowns alongside rising COVID-19 infection rates last week. However, crude prices could increase further this week as E.U. foreign ministers, who will meet Monday in Brussels, decide whether the 27-nation bloc should join the United States in banning Russian energy imports, including crude oil. Additionally, EIA reported that total domestic crude stocks increased by 4.3 million bbl to 415.9 million bbl last week.

Additional Details:

• Find today’s average gas price for each county in South Dakota at https://gasprices.aaa.com/?state=SD (hover cursor over each county to see local price)
• Find gas prices for select metro areas Rapid City, Sioux Falls and North Sioux City at https://gasprices.aaa.com/?state=SD (scroll down to “South Dakota Metro Average Prices” section and use arrows to expand)
• Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.

Source: AAA (https://gasprices.aaa.com/)

(AAA SD contributed this report/news release. Additional reporting by Todd Epp, KELO.com News.)