Verify: Are gas prices at their lowest of the year?

Are gas prices at their lowest levels of the year? We verify for you.

QUESTION:

Are gas prices at their lowest levels of the year? 

ANSWER:

We can verify this is true. 

SOURCES:

Mason Hamilton, petroleum analyst with the U.S. Energy Information Administration

RESOURCES:

U.S. Energy Information Administration

AAA gas prices

Nasdaq

PROCESS:

As roadways are expected to be crowded this upcoming 4th of July weekend, gas prices are approaching an all-time low at $2.24 per gallon, according to a recent report by AAA.

A reason for the dip in gas prices is associated with the price of crude oil, which has significantly fallen over the last three months according to the most current Nasdaq chart. Crude oil hit a seven month low on June 21 and has decreased $11 a barrel since April.

U.S. Energy Information Administration petroleum analyst, Mason Hamilton, says the price of crude oil represents about 50 percent of the cost of gasoline that consumers pay.

Some other factors that influence regional gas prices can be transportation costs and refinery outages, according to Hamilton. The analyst says other factors that influence regional gas prices can be transportation costs and refinery outages.

But gas prices are not at an all-time low in every state or region. State gas comparison on the AAA website, shows that D.C. drivers were paying $2.53 per gallon at the pump in 2016 and now pay $2.43. Even though the price of gasoline in the district has decreased by 10 cents over a year, it remains higher at $2.43 than the national average of $2.24.

According to, AAA Mid Atlantic Public Affairs Manager, John Towsend, this is not surprising. 

“There are several reasons the price of gas varies from place to place. Two of the biggest factors would be the cost of real estate and the amount of the state fuel tax. The state fuel tax in the District of Columbia and the state of Virginia are actually lower than the national average. It’s higher in the state of Maryland, but yet we pay more for gasoline in the District than we do in Virginia or Maryland. The higher the real estate cost the more we pay for gas," Towsend said. 

Hamilton says even if crude oil prices go lower, in summer time people drive more, and summer grade gasoline is slightly more expensive to produce. So seasonally gasoline prices are higher in summer than in winter  - that is totally normal.

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