At the beginning of the new year, there have been reports of consecutive drops in gasoline prices across the United States. Some states have seen regular gasoline prices drop to the lowest levels since 2021, and even California, known for its high gas prices, has hit a new low in a year. It is predicted that gas prices will remain relatively stable throughout 2026, leading to a decrease of $11 billion in total gasoline expenses for Americans compared to the previous year.
According to data from the American Automobile Association (AAA), as of Friday (January 9), the average price of regular gasoline in California was $4.224 per gallon, a decrease of 1 cent from the previous day, 4 cents from the previous week, and 25 cents from the same period last year. This marks the lowest price since June 2021, although it is still more than $1.40 higher than the national average.
On Friday, the national average gas price was $2.807, down 1 cent from the previous day, close to 3 cents from the previous week, nearly 14 cents from a month ago, and over 26 cents from the same period last year. This is the lowest price seen since March 2021.
There are 11 states in the U.S. where gas prices are below $2.50, including Arkansas ($2.369), Colorado ($2.401), Iowa ($2.363), Louisiana ($2.451), Missouri ($2.425), Mississippi ($2.439), Oklahoma ($2.241), Tennessee ($2.449), Texas ($2.42), and Wisconsin ($2.4).
Only California ($4.224) and Hawaii ($4.416) have regular gasoline prices exceeding $4 in the U.S., with eight states falling within the range of $3 to $4. This means that out of the 51 states and regions in the country, 41 have gas prices below $3.
Gas price records from GasBuddy are lower than those from AAA. Analyst Patrick De Haan of the platform mentioned that on January 8, 0.6% of gas stations in the U.S. had prices below $2. He shared that several gas stations in Colorado Springs, Colorado were pricing their gas as low as $1.73 on Friday.
Texas Governor Greg Abbott also pointed out on Friday that gas prices in the state are on the decline. He shared that regular gasoline at Costco and Sam’s Club gas stations in Texas was as low as $1.77.
In recent years, rising inflation and the conflict between Russia and Ukraine have been among the factors contributing to the difficulties Americans face due to oil prices.
Several factors have impacted oil prices recently, including the political situation in Venezuela. Many believe that the situation in Venezuela has influenced the drop in oil prices in the U.S. Some analyses suggest that the arrest of Maduro in Venezuela might lead to a slight increase in oil prices due to the uncertainty around the Venezuelan government. De Haan, however, believes that the expected increase in Venezuelan oil production may continue to suppress global oil prices in the coming years.
CNN reported that international crude oil prices dropped by 20% in 2025, marking the largest decrease since 2020. The U.S. Department of Energy predicts that oil prices in 2026 will be around $51 per barrel, lower than $65 in 2025 and $77 in 2024. De Haan suggests that the price drop is not due to insufficient demand but rather from an overall increase in supply.
De Haan also mentioned that seasonal factors drive the trends of gas prices at gas stations. Typically, January and February are when gas prices are at their lowest; from March to May, increased demand and the higher cost of summer-blend gasoline can cause prices to rise; and July and August are usually when prices peak before lowering again in the fall and winter.
GasBuddy predicts that in 2026, the national average price for regular gasoline in the U.S. will be $2.97; prices may rise in the spring, reaching $3.20 in the summer, then falling after June, with an average price of $2.83 in December. Based on this projection, Americans’ total spending on gasoline will decrease by $11 billion compared to the previous year, with the average household spending $2,083 annually (down from $2,144 last year), significantly lower than the $2,716 spent in 2022.
This forecast effectively alleviates concerns about the affordability of fuel prices. Studies have shown that rising oil prices can lead to increased costs in various industries such as transportation logistics, delivery services, construction, agriculture, and food, affecting consumer confidence. A survey conducted by JPMorgan Chase Bank on millions of bank card users many years ago found that a decrease in oil prices will increase people’s disposable income, driving consumers to spend more in other areas.