Gasoline prices in the United States are Finally Dropping

Gasoline prices in the United States are Finally Dropping
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After hitting $5 per gallon for the first time in history, gasoline prices in the United States are finally declining, providing some comfort to the world’s biggest user of the fuel.

According to the American Automobile Association, the average retail price of gasoline in the United States is still $4.631, down from a record of $5.014 a month ago but still $1.485 more than a year ago.

Prices are expected to decline further during the coming several weeks. Global fuel consumption has been dropping as a result of high prices and a strong US currency, which makes oil more costly overseas. Because supply is still limited, it is unclear if prices will continue to decline beyond that point.

WHY HAVE GAS PRICES DECLINED?

Gasoline prices in the United States have fallen in response to a reduction in crude oil and gasoline futures markets. Investors are concerned that interest-rate rises may hinder the economy as central banks become more active in tackling inflation.

According to the Energy Information Administration, demand for gasoline, jet fuel, and diesel in the United States is down more than 10% from the previous year, before the epidemic started. Gas stations have reacted by decreasing their pricing.

The dollar has an impact as well. Because oil is usually priced in US dollars, a stronger greenback makes the commodity more costly for holders of other currencies. The dollar index, which gauges the currency against a basket of six peers, reached 108.56 earlier this week, its highest level since October 2002.

WHERE HAVE THE MOST DECLINES IN GASOLINE PRICES OCCURRED?

Prices have fallen in 46 states and the District of Columbia throughout the country.

The Midwest has witnessed some of the steepest cuts, with prices falling by 52 cents in Indiana and 51 cents in Ohio in the previous month.

In contrast, prices in a few Rocky Mountain states and Hawaii have actually climbed in the previous month.

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