US drivers are seeing lower gas prices this holiday season

This holiday season, many U.S. drivers are getting the gift of lower gas prices.

According to data from motor club AAA, December has been the cheapest month for prices at the pump this year. The national average for unleaded gasoline has stayed below the $3 mark since Dec. 2, falling to its lowest level of about $2.85 a gallon on Monday.

That figure has inched up slightly since, sitting at closer to $2.86 a gallon Tuesday — but overall, consumers hitting the road ahead of the Christmas holiday will likely continue to see mild prices.

As always, some states have cheaper averages than others, due to factors ranging from nearby refinery supply to local fuel requirements. Hawaii had the highest average of about $4.44 a gallon on Tuesday, per AAA — followed by $4.30 in California and $3.92 in Washington. Meanwhile, Oklahoma had the lowest average at about $2.30 per gallon, followed by nearly $2.42 in both Arkansas and Iowa.

Still, nationwide, unleaded gasoline is down more than 18 cents than it was at this time last year, and 21 cents from a month ago. So far, AAA says that prices seen this month mark the cheapest December for gas prices since 2020, when the COVID-19 pandemic roiled the economy.

The travel organization notes that this month’s cheaper prices arrive as supply remains strong. Crude oil, the main ingredient in gasoline, has also been at a relatively mild level — with West Texas Intermediate remaining below the $60 per barrel mark for most of December.

Relief at the pump is welcome for consumers who have been feeling higher prices in other parts of their budgets — as worries about the costs of goods ranging from groceries to holiday gifts rise amid ongoing inflation and U.S. President Donald Trump’s tariffs on foreign imports.

Government data actually showed that consumer prices cooled in November, rising at just 2.7% from a year earlier. But year-over-year inflation still remains well above the Federal Reserve’s 2% target — and economists quickly warned that last month’s numbers were suspect because of delays and possible distortions from the 43-day federal shutdown.

Most Americans have continued to express anger and frustration about the high cost of living — as well as an uncertain job market. On Tuesday, the Conference Board said that its consumer confidence index fell in December to its lowest level since April.