In this article, we discuss the 24 States With Gas Prices below $3. If you would like to skip our detailed discussion of the oil and gasoline industry, you can go directly to 9 States With Gas Prices below $3.
Gasoline, more commonly referred to as gas, is a non-renewable fossil fuel widely used around the world for multiple purposes, such as heating in households, car fuel, generating electricity, and other industrial uses.
Over the past two decades, natural gas consumption has increased at a constant rate, and the pattern is the same today as well. According to the Oil Market Report published in December 2023 by the International Energy Analysis, the world consumes around 101.7 million barrels of oil per day. Moreover, the US, China, India, Japan, and Russia are the countries that consume the most oil, with the United States having a consumption of 43.7% of the world’s total oil consumption. In fact, according to Global Fire Power, the US has the highest amount of oil consumption when compared to other countries.
Within the United States, gasoline is the largest single-volume refined product sold, accounting for almost half of the national oil consumption. According to the EIA, in 2022, the United States used about 7.3 billion barrels of petroleum.
Interestingly, despite the United States having high gasoline consumption, the prices remain modest compared to European countries like the Netherlands, Iceland, and Norway. According to AS News of 2023, Hong Kong residents pay the highest gasoline prices in the world, at $11.61 per gallon. However, at the same time, the average retail price for regular-grade gasoline ranged between $3.09 per gallon to $4.51 per gallon.
The reason behind cheap gasoline prices in the US is that it focuses on refining crude oil and producing enough gasoline to meet the national market consumption and occasionally exports the excess. In 2022, the country had a net export of 1.19 million barrels of petroleum per day, as reported by the EIA.
However, it’s also important to note that gas prices are constantly fluctuating due to market trends and other geopolitical factors. For instance, at times of conflicts between oil-exporting countries, gas prices surge abnormally as the oil supply is cut down. On the contrary, when global warming awareness programs start to trend, more people switch to electric vehicles, plunging the demand for gas and reducing its prices.
In context to prices in the US, 2023 was a good year for gas consumers as the prices finally set down after surging to a record high in the previous year. Fortunately, the gas prices will fall in 2024 as well, and Americans will save $32 billion on fuel, according to CNN News. But is this good news for the oil industry market, too?
Outlook: Global Gasoline Market
With a CAGR of 4.9%, the global oil and gas market grew from $6,989.65 billion in 2022 to $7,330.80 billion in 2023, according to the 2024 Oil and Gas Market report by the Business Research Company. During the Russia-Ukraine war in 2022, oil prices surged as the supply chains were disrupted. However, despite the disruption in supply, the prices slowed down in 2023 as there was a reduction in demand for oil. The IEA forecasts that prices will continue to slow down in 2024 as well.
While a fall in oil prices is a good thing for the governments who import oil and the public who consumes it, countries like Nigeria, Saudi Arabia, and the UAE (United Arab Emirates) hardly experience anything good out of it. Their GDP largely depends on oil exports, and when prices drop, it’s impacted negatively as well. Furthermore, large oil companies like Exxon Mobil Corporation (NYSE: XOM), Shell plc (LON: SHEL), and Chevron Corporation. (NYSE: CVX) suffer equally when oil prices fall, and the impact can be seen on their profits and sales.
From the 2022 all-time high revenue, Exxon Mobil Corporation (NYSE: XOM)’s revenue for 2023 Q3 fell by 54% compared to the same quarter in the previous year. The key player in the oil industry, Exxon Mobil Corporation (NYSE: XOM), earned $9.1 billion in revenue, a whopping decrease from $19.7 billion in 2022.
Similarly, due to falling oil and gas prices, Shell PLC (LON: SHEL)’s earnings plunged by less than half of what they were in 2022. Shell PLC (LON: SHEL) earned a profit of $5.07 billion in the second quarter of 2023, while the profits were $11.5 billion a year ago.
As for the Chevron Corporation (NYSE: CVX), the company was not spared either by the falling oil prices. In the third quarter of 2023, the company earned a profit of $6.53 billion, which is not half but a 42% decline from its previous year’s third-quarter profit. Unfortunately, with what the forecasts suggest, 2024 will probably not be a good year for the key players in the oil and market industry either.
Overall, it’s safe to conclude that like any other market, the oil market fluctuates as per the ongoing trends as well. Entering 2024, gas prices are falling across the United States (See: 20 States With the Cheapest Gas Prices in the US). Let’s take a look at 28 states with gas prices below $3 as of today.
24 States With Gas Prices Below $3
Our Methodology
For our list of 24 States With Gas Prices below $3, we first listed the average gas prices across the 50 states and then shortlisted the ones with prices below three dollars. The list is in descending order, going from the highest price to the lowest price. Note that the prices mentioned on our list are accurate to the day of writing this article i.e. 5 February 2024, and that they are subject to change on any given day.
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24 States With Gas Prices below $3
24. South Carolina
Gas Price as of 5 Feb 2024: $2.920/gal
South Carolina kicked off 2024 on a good note, with its gas prices being below the national average at $2.901 per gallon on January 31st, and at $2.920/gal on February 5th. The primary reasons behind this price drop are changes in demand and easy distribution of gasoline in the state. In the next few weeks, gas prices are expected to decrease further, according to GasBuddy.
23. Minnesota
Gas Price as of 5 Feb 2024: $2.910/gal
On number twenty, we have Minnesota which also experienced a drop in gas prices between January and February. Towards the end of January, the regular gas price in the state was at $2.891 per gallon and has now risen to $2.910/gal. Within the next few months, this can increase more due to global tensions and a switch from winter-blend gasoline to the normal one.
22. Alabama
Gas Price as of 5 Feb 2024: $2.895/gal
Alabama is located close to the Gulf Coast, surrounded by oil refineries. Since distribution is easy and supply is high, Alabama has seen a decrease in gas prices over the winter season. Currently, the price of regular gas in Alabama is $2.895 per gallon.
21. Montana
Gas Price as of 5 Feb 2024: $2.890/gal
Montana also observed a sudden increase in gas prices during the last year. However, entering 2024, Montana’s gas prices have dropped below the national average at $2.890 per gallon. Low gas taxes in the state also keep the gas prices stable, which is a plus for the residents.
20. Idaho
Gas Price as of 5 Feb 2024: $2.889/gal
Amongst all states, Idaho has seen a drastic decrease in gas prices in the last few months. Regular gas is $2.889 per gallon, a 9-cent decrease from previous prices. According to analysts, there may be a slight decrease in gas prices in Idaho before it increases mid-year.
19. Indiana
Gas Price as of 5 Feb 2024: $2.860/gal
Indiana saw a decrease in gas prices over the first week of February, with prices currently below the national average of around $2.860 per gallon. According to GasBuddy, gas prices in Indiana are not expected to rise much in 2024, and should not touch $4 unless there are any refinery issues.
18. Louisiana
Gas Price as of 5 Feb 2024: $2.858/gal
Louisiana has many oil refineries and a good distribution system, which ensures cheaper gas prices for its residents. Currently, gas prices in Louisiana are at $2.858, $3.251, and $3.623 for regular, mid-grade, and premium respectively.
17. New Mexico
Gas Price as of 5 Feb 2024: $2.858/gal
Gas prices in New Mexico have decreased significantly since last year, going from $3.373 per gallon to $2.858 in February. There was also a decrease in the mid-grade and premium gas, which now stand at $3.206 and $3.499, respectively.
16. Tennessee
Gas Price as of 5 Feb 2024: $2.846/gal
Tennessee’s gas prices are $2.846 for regular, $3.255 for mid-grade, $3.622 for premium, and $3.713 per gallon for diesel. While the regular gas price today is $0.05 cheaper than its bordering state of Alabama, it is expected that gas prices will increase in Tennessee by mid-February.
15. Texas
Gas Price as of 5 Feb 2024: $2.842/gal
Texas is home to the most oil refineries in the United States. The state produces a large volume of crude oil and gas, contributing to lower prices. As of February 2024, the regular gas cost in Texas is $2.842 per gallon.
14. Iowa
Gas Price as of 5 Feb 2024: $2.840/gal
Iowa has strong retail competition in the gas market, which results in cheaper gas prices for the residents. Many gas stations in Iowa offer repair services, replacement parts, and various other services, and that’s another factor that adds to the increase in competition and decrease in prices. Gas in Iowa is $2.840 per gallon as of 5 February 2024. Compared to last year when the price was only $2.326, this is a significant increase. However, it’s still below the national gas average and that suggests the possibility of a rise in gas prices in Iowa over the next few months.
13. North Dakota
Gas Price as of 5 Feb 2024: $2.832/gal
As of 5 February 2024, North Dakota gas prices are below the national average at $2.832 per gallon. However, they are most likely going to rise around mid-February due to higher demand. Currently, the cheapest gas prices in North Dakota are in Fargo and Grand Forks.
12. Nebraska
Gas Price as of 5 Feb 2024: $2.820/gal
Next, we have Nebraska, where gas prices have finally decreased after experiencing a sudden increase last year. As of February 2024, the price for regular gas in Nebraska is $2.820 per gallon. However, cold weather may increase gas prices in Midwest states like Nebraska over the next few weeks.
11. Missouri
Gas Price as of 5 Feb 2024: $2.809/gal
Missouri has many crude oil and gasoline pipelines throughout the city, resulting in lower gas prices. As of February 2024, Missouri’s gas prices are $2.809 per gallon for regular gas and $3.461 for premium.
10. South Dakota
Gas Price as of 5 Feb 2024: $2.804/gal
In comparison to the majority of its neighboring states, South Dakota has seen a significant decrease in its gas prices. As of today, the price of regular gas sits at $2.804 per gallon, making it 23 cents less than the average price of regular gas in South Dakota last month, and $0.016 less than the gas price in Nebraska today.
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Disclosure: None. 24 States With Gas Prices below $3 is originally published on Insider Monkey.