Gas Prices Hit Lowest July Levels in Four Years as Summer Driving Peaks

As summer rolls on, small business owners can breathe a sigh of relief with gas prices holding steady, providing a crucial respite amid rising demand. According to the latest report from AAA Gas Prices, the national average for a gallon of regular gasoline has dipped slightly to $3.14, offering the same pricing padding that was noted in July 2021, a time when economic pressures were less pronounced.

Drivers benefiting from this pricing stability are not just consumers; small business owners also stand to gain from these trends. Lower fuel costs can translate into decreased operational expenses—an essential factor when tightening budgets amidst fluctuating demand.

The July national average settled at $3.15, consistent with last year’s price, though crude oil prices have edged up due to increased demand. The latest figures from the Energy Information Administration (EIA) highlight a notable rise in gasoline demand, climbing from 8.96 million barrels per day to 9.15 this past week. Despite this uptick, the rise in crude oil prices has not yet translated into soaring pump prices for consumers, marking an ironic but beneficial offset for businesses relying on transportation.

For small businesses, especially those in logistics or sales reliant on vehicle travel, maintaining low fuel costs is crucial. “Small businesses are often hit hard by rising operational costs, so stable fuel prices can provide a much-needed cushion,” stated a representative from AAA. This predictability enables owners to plan their budgets more effectively while keeping prices competitive for their customers.

U.S. crude oil inventories have shown a modest increase of 7.7 million barrels, reaching 426.7 million barrels—approximately 6% below the five-year average for this time of year. These dynamics indicate a potentially stable market moving into the latter part of the summer driving season, which is often a busy time for many small businesses that depend on vehicle fleets.

However, the challenges of fluctuating energy sources cannot be overlooked. Small business owners should also remain mindful of variables like the rising popularity of electric vehicles (EVs) impacting gas demand. The national average per kilowatt hour for EV charging has remained at 36 cents, but rates vary greatly by state. For instance, electric charging costs are significantly lower in Kansas at 25 cents per kWh, compared to 52 cents in West Virginia.

Understanding these regional differences can influence sourcing decisions for small business owners, particularly those considering transitioning to EVs to capitalize on lower operating costs in the long term.

Furthermore, regional fuel price variances can affect market strategy. California, for example, leads in gas prices at $4.48 per gallon while Mississippi enjoys the lowest at $2.71. Small business owners operating across state lines may need to think strategically about their supply chains and delivery routes, considering both fuel prices and travel distances.

With summer peak travel upon us, small businesses can use resources like the AAA TripTik Travel planner to navigate existing gas prices and EV charging options. Companies can utilize such planning tools to optimize their logistics and reduce costs, which is paramount for maintaining competitiveness in the market.

For those eyeing sustainable practices, the steady EV charging rates present an opportunity to integrate greener technology into their operations. Although upfront costs for EVs may seem higher, the long-term savings in fuel and maintenance could lead to significant reductions in overhead—factors that are especially appealing to small businesses looking to innovate while managing expenses effectively.

As we head into August, business owners should keep a close eye on pricing trends and inventory fluctuations. With stable fuel prices, there is optimism for maintaining profitability, but remaining adaptable in a fast-changing market will be pivotal for driving future success.

For more detailed insights into current gas and electric charging prices that might impact your business, visit the original AAA report here.

Image Via AAA

This article, "Gas Prices Hit Lowest July Levels in Four Years as Summer Driving Peaks" was first published on Small Business Trends