For the first time in nearly five years, the national average price for regular gasoline has slipped below the $3 mar, a milestone many drivers weren’t sure they would see again in their lifetimes. According to the US Energy Information Administration, the nationwide average on Dec. 1 came in at $2.99 per gallon, down slightly from $3.01 the week before.
In real purchasing power, adjusted for inflation, that’s the lowest weekly average since February 2021, right after Joe Biden was sworn in as president.
AAA’s real-time sampling of station prices showed similar numbers, hovering around $2.96 per gallon during the same period.
The reasons for the dip are largely global. Crude oil prices, which make up roughly 50–60% of what drivers ultimately pay at the pump, have eased. West Texas Intermediate crude settled around $68 per barrel in late November, approximately 5% lower than mid-month. Increased output from non-OPEC nations such as the US, Canada, and Brazil, along with softer worldwide demand, have pushed oil prices down. Refining and distribution costs have remained stable, offering little upward pressure.
But the national average masks major regional disparities.
The US Gulf Coast continues to enjoy the lowest prices at $2.55 a gallon, benefiting from its dense network of refineries and export terminals. The Midwest follows at about $2.85, supported by direct access to Gulf pipelines.
At the other end of the spectrum is the West Coast, where drivers are still paying $4.03 per gallon on average. Isolated fuel markets, heightened environmental regulations requiring special blends, and the need to import refined products keep prices stubbornly high. The Rocky Mountain region averages $3.25, while the East Coast sits near $3.05.
US gasoline consumption has remained steady at around 8.9 million barrels per day, and inventories are slightly above the five-year average, factors that have helped keep prices from whipsawing during the holiday travel season.
As drivers compare prices across the country, many forget an important piece of the equation: state taxes and fees. While they don’t usually dictate short-term fluctuations like the current crude-driven drop, they play a significant structural role in what consumers pay every day.
Combined federal and state taxes account for roughly 17% of today’s $3-per-gallon national average. The federal tax is fixed at 18.4 cents per gallon, but state taxes vary dramatically.
California leads the nation with an estimated effective tax burden of roughly 90 cents per gallon once sales taxes and environmental fees are factored in.
Other high-tax states include Illinois, Washington, and Pennsylvania. Those charges alone can add well over 50 cents a gallon compared to lower-tax states.
Alaska, by contrast, has the lowest state fuel tax in the country at just 8.95 cents per gallon, a major reason Alaskans often pay less at the pump than some of their West Coast neighbors despite higher shipping and refining challenges.
More than half of states index their fuel taxes to inflation or wholesale prices, meaning rates automatically adjust upward unless lawmakers intervene.
So while the latest drop is welcome news for many Americans, how much relief shows up at the pump still depends heavily on where you live.
