Why gas prices are trending downward
Inflation is edging down slowly and steadily, as noted by the Consumer Price Index and the Producer Price Index.
But when it comes to gasoline, it’s prices themselves that are falling. Gas inflation has actually been negative — down 6% from October to November and down nearly 9% year-over-year.
Gar prices are also down nearly 20% since peaking for the year at $3.88 a gallon in late September, says Andrew Gross at AAA.
“And we will probably keep shaving a penny, maybe two cents, every day through the end of the year and into January,” he said.
Gasoline demand is down, Gross said, with fewer people driving after the summer holidays. Plus, “it could be that people’s driving habits changed during the pandemic and also when they were being forced to pay $5-a-gallon gasoline.”
Every day, there are more cars on the road that don’t use gas or at least use less of it, according to Karl Brauer at online auto marketplace iSeeCars.
“Gas prices have always had a big impact on demand for alternative-fuel vehicles — hybrids and electric,” Brauer said.
Last year’s $5-per-gallon gas pumped up EV sales. They’re tapering off a bit now, with gas just above $3 a gallon, Brauer noted.
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