Dive Brief:
- Fuel savings platform GasBuddy reported this week that the average price of gasoline in the U.S. is expected to drop below $3 per gallon soon. That would mark the lowest it’s been since April 2021, according to the U.S. Energy Information Administration.
- As of Monday, the national price of gas stood at $3.07 per gallon, while the median price was $2.99, according to GasBuddy, which compiled data from over 12 million price reports from more than 150,000 gas stations.
- Weak fuel volumes and margins have created headaches for many notable convenience retailers this year, such as 7-Eleven and Parkland. A drop in the national average may not only help retailers reel in more fuel profits, but also attract more customers inside their c-stores.
Dive Insight:
This week, $2.99 was the most common gas price U.S. drivers encountered, followed by $2.89, $3.19, $3.09 and $2.79, according to GasBuddy.
Not only is the price of standard gasoline quickly dropping, but the average cost of diesel has already fallen to its lowest level in over three years, the firm noted in its report.
While this is all occurring as the general election nears, “politicians have little influence over the strong seasonal forces that drive prices lower in autumn,” Patrick De Haan, head of petroleum analysis at GasBuddy, said in the report.
De Haan added that he expects the decline in gas prices to continue into and even beyond the upcoming election.
“With winter gasoline soon to reach the rest of California, and demand continuing to decline as Americans grapple with colder weather, the drop in demand is pushing gas prices down — not politicians on either side, as much as they might like to think they do,” De Haan said.
NACS shared earlier this year that the main factors of retail gasoline prices are the cost of crude oil, taxes, refining costs and distribution and marketing costs. The association added that fuel type, delivery method, length of refiner contracts and volume can also impact a retailer’s fuel prices.
A notable catalyst for the recent fall in gas prices was a drop in the cost of oil after Israel signaled its attacks on Iran were over and Iran suggested it would not respond, GasBuddy reported.
Although fuel is still a central part of running a retail site, many operators are shifting their attention toward the products and services inside their c-stores amid broader efforts to keep customers on-site for longer periods of time. Food has become a major focus of this in recent years, with operators such as Casey’s General Stores, GetGo Café + Markets, Wawa and others openly sharing intentions to compete with quick-service restaurants.
