Gas Prices Drop to Summer Low, National Average at $3.16 per Gallon

Gas prices are experiencing a welcome dip this summer, creating a potential win for many small business owners who depend on transportation and logistics. The national average for a gallon of regular gasoline has fallen to $3.16—a one-cent drop from the previous week—matching levels last seen in the summer of 2021. This decline comes at a critical time, as small businesses gear up for both summer travel and the busy back-to-school season.

For small business owners, especially those in retail, delivery, and services that rely on vehicle fleets, lower gas prices could translate into notable cost savings. The average price was significantly higher just a year ago, at $3.51 per gallon, meaning the current rates could positively impact operational budgets. “Lower gas prices help business owners manage their expenses more effectively, particularly those who operate delivery services or have a mobile workforce,” says a representative from the American Automobile Association (AAA).

In analyzing the data from the Energy Information Administration (EIA), gasoline demand took a noticeable dip from 9.15 million barrels per day to 8.48 million barrels last week. Concurrently, the supply increased, rising from 229.5 million barrels to 232.9 million. While gasoline production has decreased to 9.1 million barrels per day, the improvements in supply relative to demand could help maintain lower prices in the short term.

Oil market dynamics, however, could pose potential risks. The West Texas Intermediate (WTI) crude oil was reported to drop by 14 cents, settling at $66.38 a barrel, with inventories falling by 3.9 million barrels from the previous week. Present levels are about 8% below the five-year average for this time of year, signaling volatility that could influence gas prices in the coming weeks. Business owners should therefore keep their eyes on market trends to navigate any price fluctuations effectively.

Additionally, small businesses exploring electric vehicle (EV) integration might find interesting developments as well. The national average cost for charging at public EV stations remained stable at 36 cents per kilowatt hour. For small businesses, investing in EVs can lower fuel expenditures and appeal to eco-conscious customers. However, the infrastructure to support EV charging is not uniformly spread across the country, which could complicate the transition for businesses operating in regions with limited charging options.

Indeed, geographical differences in fuel pricing could impact small businesses differently. For instance, states like California and Hawaii have some of the highest gas prices in the nation, with averages of $4.50 and $4.48, respectively. In contrast, states like Mississippi and Oklahoma enjoy some of the lowest prices, around $2.72 and $2.77. Small business owners should evaluate how local gas prices could impact their operational costs, especially for those with multi-state operations.

Beyond immediate financial implications, the current landscape raises questions about the long-term sustainability of various fuels. Observing trends in fuel consumption might encourage small businesses to consider alternative transportation methods or rethink logistics to mitigate costs in the future.

Moreover, the looming threat of tropical storms during this season could also affect gas prices. A low-pressure system off the Gulf Coast has the potential to develop further, a situation small business owners should be aware of, as disruptions can lead to price hikes due to refinery damage or gasoline distribution challenges.

Leaning on tools like the AAA TripTik Travel planner can help business owners track real-time gas and electric charging prices along their routes, enabling smarter decisions and potentially further savings.

Small business owners stand at a critical juncture as they grapple with rising operational costs and strategize for future efficiencies in logistics and supply chain management. Making informed decisions about fuel options and staying ahead of market trends could help mitigate costs and position businesses for success in an ever-evolving market landscape.

For more information on current gas prices, please refer to the original AAA press release at AAA Gas Prices.

Image Via AAA

This article, "Gas Prices Drop to Summer Low, National Average at $3.16 per Gallon" was first published on Small Business Trends