The average American is paying 45 cents less for a gallon of gasoline compared to last year despite rising oil prices, according to analysis published Monday by the American Automobile Association (AAA).
The average American is currently paying $2.21 per gallon of gasoline. The current price is likely close to the annual high of gas, as historically prices increase right before the summer driving season begins.
In May of 2013 and 2014 the average American paid over $3.50 per gallon, so today’s prices are comparatively cheap, even though the price of oil has been extremely volatile in recent months and is gradually rising, according to analysis published Tuesday by the Energy Information Administration (EIA).
American will pay $2.04 per gallon of gasoline this summer, according to analysis published last month by the EIA. The EIA predicts gas prices from April to September will be 59 cents per gallon lower than the price last summer. The agency predicts this summer will have the cheapest average gas price since 2004.
Throughout all of 2016, the average U.S. gas price should be around $1.94 per gallon.
Gasoline is cheap largely due to increased U.S. oil production and weak economic growth in China. In America, hydraulic fracturing, or fracking, and horizontal drilling have unleashed vast oil reserves and helped energy prices drop 41 percent over the course of 2015, according to the EIA.
Last month’s EIA analysis estimates the average American household will spend about $350 less on gasoline in 2016 than it did in 2015 and about $1,000 less than it did in 2014.
Americans spent $370 billion on gasoline in 2014, when retail gasoline prices averaged more than $3 per gallon. The enormous amounts of money spent on gas mean even small decreases in price are equivalent to huge savings. The huge drop since 2014 is equivalent to $102 billion in savings for the country. The American household likely saved $700 to $750 at the pump in 2015 compared to 2014.
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