VIRGINIA BEACH, Va., (July 31, 2015) - Gas prices are falling at the fastest rate since January due to cheaper crude oil costs and the resolution of some refinery issues. The average price of gas for Hampton Roads has dropped for 17 days in row for a total of 10 cents per gallon in July. Today’s Hampton Roads average price of gas is $2.50 per gallon, which is the lowest average for this time of year since 2009.
“Lower gas prices at the pump are a welcoming sight for many that are on the road, especially through the busy summer driving season,” said Georjeane Blumling, Vice President of Public Affairs for AAA Tidewater Virginia. “Millions of people are hitting the roads right now and these gas savings should make their trips more affordable.”
Americans drove 275.1 billion miles in May, which was the highest monthly total on record, according to the most recent report by the Federal Highway Administration. It is likely that driving has continued to increase this summer as Americans take long road trips. This is the second year in a row that gas prices dropped in July for Hampton Roads. Last year, average prices dropped 16 cents per gallon during the month before eventually plummeting $1.56 per gallon through January of 2015.
Some drivers are asking what has kept gas prices higher than would otherwise be expected based on the cost of crude oil. Strong fuel demand and refinery problems are most likely to blame. Gasoline demand in July is up about six percent compared to a year ago, based on the latest four-week averages by the EIA. Strong gasoline demand can lead to tight supplies, especially if refineries are experiencing problems. Lower gas prices and a growing economy have helped motivate people to drive more this year.
The average price of diesel is only seven cents per gallon more than gasoline today. The difference between gasoline and diesel reached its most narrow point since 2009 in July. In January, the average price of diesel was 90 cents more expensive per gallon than gasoline. Gasoline and diesel prices are generally closest in the summer, while strong gasoline demand and refinery problems have kept gas prices higher than would otherwise be expected based on recent crude oil costs.
In the coming weeks, gas prices should continue to drop to catch up with the recent decline in the cost of crude oil. All things being equal, a $12 decline in crude oil costs could reduce gas prices by as much as 29 cents per gallon. Given that prices have already dropped about 14 cents per gallon since reaching a 2015 high in June, drivers could see prices drop another 15 cents per gallon in the near term if oil remains stable and refineries operate at current production levels. If oil continues to fall and gasoline supplies grow larger this month gas prices could drop even further.
As part of North America’s largest motoring and leisure travel organization, AAA Tidewater Virginia provides its more than 325,000 members with travel, insurance, financial and automotive-related services. Since its founding AAA Tidewater Virginia has been a leader and advocate for the safety and security of all travelers. For more information, visit AAA.com and follow us on Twitter at Twitter.com/AAATidewaterVA or on Facebook at facebook.com/AAATidewaterVirginia