The average price of petrol in the United States dropped below $4 a gallon on Thursday, providing some much-needed relief to American drivers after prices soared to record highs earlier this year.
According to the American Automobile Association, the national average price for regular unleaded petrol fell to $3.990 a gallon (3.8 litres) on Thursday. Petrol prices have now fallen for eight straight weeks.
Prices at the pump peaked at a record $5.02 in June, causing drivers to buy less fuel even during the busy summer driving season.
Oil and gas prices have fallen in recent weeks amid uncertainty surrounding the US economy and as the administration of President Joe Biden reinforces supply by releasing millions of barrels from the US Strategic Petroleum Reserve (SPR).
Crude prices jumped earlier this year after economies began to open up from their pandemic-induced lockdowns that shuttered businesses and halted travel. Russia’s invasion of Ukraine in February also sent crude rocketing.
At one point, global benchmark Brent crude oil, the main driver of petrol prices, reached $139 a barrel. It was at $98 on Thursday.
The fall in prices has helped millions of Americans living on the edge as high inflation continues to take a bite out of their spending power. The price of food and housing continue to soar.
At the pump, some states are seeing more relief than others. For example, petrol prices in the state of California are still hovering around $5.38 a gallon. But people in Texas are seeing a gallon go for an average of $3.49.
Petrol prices and the November election
The most recent price drop at the pump may help support Biden’s administration and Democrats in Congress just in time for November’s midterm elections. Biden has continued to insist that the US economy is healthy even as seasoned economists sound the alarm.
The White House has taken several steps to lower prices at the pump as they reached record highs. Biden authorised the release of more than 180 million barrels of crude oil from the US emergency stockpile.
The Treasury Department said in July that the SPR release, together with releases from members of the International Energy Agency, reduced the cost of petrol or gasoline by 17 cents to 42 cents per gallon.
Even though people are “still hurting”, inflation is beginning to abate, according to President Biden.
The consumer price index (CPI) – a major gauge of inflation – jumped 9.1 percent in June. That was the highest reading since 1981.
On Wednesday, however, fresh US data showed that CPI increased by 8.5 percent in July, still high but down from June’s 9.1 percent surge. A cooling of inflation is mostly attributed to the fall in petrol prices.
