The retail price for regular-grade gasoline in the United States on May 22, the Monday before Memorial Day weekend, averaged $3.53 per gallon (gal), 26% (or $1.24/gal) lower than the inflation-adjusted price a year ago. Memorial Day gasoline prices last year were the highest since 2012. The American Automobile Association (AAA) expects 6% more miles traveled this Memorial Day weekend compared with last year because of lower gasoline prices. Although retail gasoline prices have come down from a year ago, they remain higher than during the period from 2019 through 2021.
Retail gasoline prices have fallen from last year because of lower crude oil prices. Crude oil is the main component of retail gasoline prices, making up more than half of the retail price. As of May 23, the average May spot price for Brent crude oil was $76 per barrel (b), a 35% ($41/b) decrease from the inflation-adjusted average last May. The May Brent crude oil price is also slightly below the inflation-adjusted averages for May 2019 and 2021. Crude oil prices have come down because of increasing global production and weakening global economic conditions.
Although crude oil prices are lower now than the inflation-adjusted prices of 2019 and 2021, retail gasoline prices are higher. One reason for the higher retail gasoline prices is that gasoline inventories have been at or below five-year (2018–22) lows in 2023 and, as of May 24, remain 10% below the May five-year average, according to our Weekly Petroleum Status Report. More gasoline is being consumed in the United States now than any other year since the start of the pandemic, which has reduced inventories.
U.S. gasoline prices vary regionally, reflecting local supply and demand conditions, state fuel specifications, and state taxes. Retail gasoline prices are usually the highest on the West Coast because of the region’s limited connections with other major refining centers, tight local supply and demand conditions, and California’s gasoline specifications that make it more costly to manufacture. West Coast state taxes are also higher than the national average. Regional gasoline prices are usually the lowest on the Gulf Coast, where about half of U.S. refining capacity is located and more gasoline is produced than is consumed. Gulf Coast states also generally have lower gasoline taxes than the national average. Heading into the Memorial Day weekend, retail gasoline prices averaged $4.51/gal on the West Coast and $3.04/gal on the Gulf Coast. Prices averaged $3.38/gal on the East Coast, $3.47/gal in the Midwest, and $3.58/gal in the Rocky Mountains.