Personal Finance

Gas prices drop to a 3-year Labor Day low, as more drivers hit the road this weekend

By August 28, 2019 No Comments

If you’re heading out on an end-of-summer road trip this Labor Day, you might find yourself spending less on fuel and more on food and fun.

That’s thanks to what may be the lowest average nationwide gasoline rates for this holiday weekend in three years, according to AAA.

Today’s average price of just more than $2.58 per gallon is 25 cents cheaper than during the Labor Day weekend last year, when it was $2.83, and 5 cents cheaper than the same period in 2017 ($2.63). Gas prices dropped in every U.S. state other than Hawaii compared to Labor Day 2018, with Idaho posting the largest decrease, at 16.8%.

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That means people will have more money in their pockets and they’ll be more likely to hit the road, said AAA spokesperson Jeanette Casselano. “When gas prices are cheaper, we tend to see more people traveling.”

That’s in keeping with the findings of a consumer survey AAA did earlier in the year. Asked in February what they’d do if gas prices stayed the same or lower in 2019, 33% of respondents said they would go on at least one additional summer road trip and 27% said they would increase the distance of their trip.

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“You’ve got your people who have their plans set in stone but you also have those who have been teetering, or it’s that last week of summer and they’ve been thinking about a road trip,” Casselano said. “People feel more inclined to take those road trips because they feel like they’re getting a better bang for their buck.”

Whether or not you head out on the highway and how much it costs depends on where you live.

Regardless of price drops, percentage-wise, in individual states, the highest gas prices still tend to be in the West, upper Midwest and Northeast, where they range from more than $2.78 to almost $3.70 per gallon, according to AAA.

Drivers in Texas and the South enjoy the lowest rates, from about $2.20 to $2.36 per gallon. Drivers in Louisiana and Mississippi have the lowest prices nationwide for regular, paying just over $2.20 per gallon.

“In regions where they see more than a quarter’s worth of savings, people may be more inclined to travel than others elsewhere, just because they’re seeing such [significant] savings compared to earlier in the year,” said Casselano.

However, even in states with the highest gas prices, such as California, people are still going to travel, she said. The Golden State’s average gas price today of just over $3.57 per gallon is almost $1 higher than the national average, and some California counties are seeing prices as high as $5 per gallon.

People feel more inclined to take road trips because they feel like they’re getting a better bang for their buck.

Jeanette Casselano

AAA spokesperson

The only state with a higher average gas price is Hawaii, at almost $3.66 per gallon.

“They may not travel as far or eat out as much [and] they may look for more free activities, but they’re going to take their summer road trip,” said Casselano. “Summer is synonymous with trips and time off … [and] people are going to take their road trips, whether prices are high or low.”

While price are significantly lower this week compared to the week prior to Labor Day last year, average nationwide gas prices have not dipped to their most recent nadir, seen in late December and early January with lows of about $2.24 per gallon.

That drop was tied to last year’s general markets sell-off, when stocks suffered their worst December since the Great Depression.

(CNBC’s John Schoen and Nate Rattner contributed to this report.)

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