U.S. gasoline prices this Thanksgiving are at their lowest since 2020

On the Monday before Thanksgiving, the retail price of regular gasoline averaged $3.04 per gallon (gal) across the United States, 7% less than the same time last year. Retail gasoline prices this Thanksgiving are at their lowest since 2020, when the COVID-19 pandemic disrupted gasoline demand.

The American Automotive Association (AAA) forecasts nearly 80 million people will travel 50 miles or more for the Thanksgiving holiday, a 2% increase compared with 2023.

Typically, U.S. retail gasoline prices follow a seasonal trend: prices rise in the spring and peak in late summer, when people drive more frequently, before declining in the winter. This year, lower crude oil prices and declining refining margins are supporting the historical trend and driving gasoline prices lower.

The cost of crude oil is the single-largest component of retail gasoline prices; we estimate the crude oil price contributed 53% to the price of gasoline in September 2024. The average Brent crude oil price of $74 per barrel so far this November is about 10% lower than in November last year. Weak growth in global oil demand has helped reduce crude oil prices, even with relatively large production cuts by OPEC+ and geopolitical tensions in the Middle East.

Refining margins, which contribute 15% on average to the price of gasoline, usually decrease in the fall when the annual transition to winter-grade gasoline allows refiners to use less expensive components to produce gasoline. This year, relatively weak demand for petroleum products and increases in global refining capacity are also contributing to lower refining costs and helping bring down gasoline prices.

U.S. gasoline prices vary regionally, reflecting local supply and demand conditions, different fuel specifications required by state laws, and taxes. Regional gasoline prices are usually the highest on the West Coast because of the region’s limited interconnections with other major refining centers, tight local supply and demand conditions, and requirements for gasoline specifications that are more costly to manufacture. West Coast retail prices on November 25 averaged $3.88/gal, a decrease of 12% compared with the same time last year.

The Rocky Mountain region faces similar logistical constraints as the West Coast, although overall the region has both less supply and demand. Rocky Mountain retail gasoline prices averaged $2.83/gal on November 25, down 12% from 2023.

Gasoline prices are usually the lowest on the Gulf Coast, home to most U.S. refining capacity and where gasoline production exceeds consumption. On November 25, Gulf Coast retail gasoline prices averaged $2.64/gal, down 5% from the same time last year.

On the East Coast, which has the most gasoline demand of the five regions, retail gasoline prices averaged $3.01/gal, down 5% from 2023.

In the Midwest, prices averaged $2.87/gal, a decrease of 8% from this time last year.