Outside of the college basketball sphere, there’s another kind of March madness happening at the gas pumps.
After surging to a record high earlier this month, fuel prices have pulled back slightly in the last week.
While some experts are cautiously optimistic the worst may be over, they quickly caution a multitude of factors could reverse the trend.
In Virginia, gas fell about 13 cents in a week, marking one of the largest drops in the nation, according to AAA Mid-Atlantic. In Halifax County, the average price for a gallon of gas was $4.12 Thursday.
The rapid rise was driven by the price of crude oil that peaked at about $130 a barrel when Russia launched its invasion of Ukraine. Crude oil — the benchmark used to set the price of gas — had dropped to about $110 barrel Thursday.
Also, overall prices could have steered downward because of a dip in demand, bucking the normal trend for this time of year. But it’s not clear if the dip was just a data blimp or a nod to a change in driving.
“With warmer weather and longer days, we typically see an uptick in gasoline demand at this time of year but last week we saw a drop in demand instead,” Morgan Dean, a spokesperson for AAA Mid-Atlantic, said in a statement.
Even with the reprieve from earlier this month, prices are highly elevated when compared to $3.39 last month and $2.75 a year ago.
“There is no telling, at this point, whether this downward trend will continue, or for how long, because of the unpredictable nature of the war in Ukraine and other geo-political influences,” Dean adds. “But, for the moment anyway, there is hope that the worst is behind us.”
Across the nation, prices dropped about 9 cents in a week. That represents the largest decline since January. Since 2020 rolled in, the national average of gasoline has been on an upward march blamed on strained supply and increase in demand.
GasBuddy also expects a slow drop in prices to continue.
“GasBuddy, last week, predicted that a top was in for the national average price of gasoline, and indeed, for the first time in 12 weeks, the national average price of gasoline has declined,” said Patrick De Haan, a GasBuddy spokesperson. “While the decline is still subject to changes in global supply and demand, COVID and Russia’s war on Ukraine, we are poised to see additional downdrafts at the pump this week in most areas.”
But the impacts aren’t the same across the nation. For example, gas prices in Los Angeles surpassed $6 per gallon on average Wednesday, making it the first major city in the U.S. to reach prices at this level, GasBuddy reported.
“The increase in prices is largely due to rebounding oil prices because of the ongoing Russian war on Ukraine, but recent refinery kinks in Southern California amidst a rise in seasonal demand has pushed Los Angeles over the top,” De Haan explained.
Surpassing $4 a gallon represents a tipping point of sorts for Americans, according to a recent AAA study.
Nearly 60% of respondents said they would change their driving habits — or lifestyle — when prices topped $4.
Nearly 4-in-5 said they would drive less, but age plays a major factor in response. For example, 18 to 34 year-olds are almost three times as likely as those 35 and over to consider carpooling, which would likely involve major changes to their daily travel plans, the survey found.
Also, those 35 and over are more likely to favor combining trips and errands (68% versus 52%) and to reduce shopping or dining out (53% versus 43%).
Vacations still on
Paying more to fuel a vehicle isn’t likely to drive people away from summer vacations, the survey noted.
AAA found that more than half of Americans plan to venture on vacation this summer. Of those, 42% said they wouldn’t change plans no matter how high gas prices reached.
“For now, gasoline demand has shown absolutely no signs of buckling under the pressure of higher prices, even as California nears an average of $6 per gallon, with spring break travel well underway,” De Haan said. “If the situation does worsen, with more oil being kept away from global markets, it’s not impossible that gas prices would still have to climb a considerable amount for Americans to start curbing their insatiable demand for gasoline.”