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The national average price for a gallon of gasoline fell to just over $3.40 this week, a welcome relief for drivers as summer begins and just a drop in the bucket compared to the all-time high two years ago as below-average demand and falling oil prices provide relief at the pumps.

Key data

According to data from GasBuddy, drivers are paying an average of just over $3.42 on Tuesday, while AAA puts the national average at $3.44 – although the price varies widely across states, from nearly $5 on the West Coast to under $3 in some Southern states.

The cheapest gasoline in the country is found in the southeastern and southern Great Plains states, where low state gasoline taxes help keep prices below the national average. These include Mississippi ($2.92), Arkansas ($2.96), Oklahoma ($2.97), Texas ($2.99) and Tennessee ($3.01).

In recent weeks, prices have been steadily declining in the South Plains and Great Plains. In the last month, they have fallen by as much as 29 cents in Kentucky (to $3.14), 22 cents in Alabama (to $3.10), 21 cents in Texas and 18 cents in Missouri (to $3.07).

The biggest price drops occurred in the Southwest and West Coast, while in Alaska the average price fell 39 cents last month and four cents over the past year, to just under $4 per gallon.

Also in California, the state with the highest gasoline prices, gasoline prices fell 38 cents to $4.91 last month, while Nevada saw the same drop to $4.08.

Gasoline prices fell 33 cents (to $3.46) in Utah last month, 27 cents (to $3.69) in Arizona, 27 cents (to $4.15) in Oregon, 27 cents (to $3.34) in Indiana and 26 cents (to $4.39) in Washington.

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Big number

$425 million. That’s the amount Americans’ weekly gasoline spending is expected to fall compared to the same period last year, says Patrick De Haan, chief analyst at GasBuddy, who expects the price drop to intensify ahead of the busy Fourth of July weekend.

Surprising fact

The price drop comes at a time of year when gasoline prices typically soar due to rising demand for fuel in the U.S. According to GasBuddy, retail gasoline demand rose 2.7% for the week ended June 8. The Energy Information Administration also reported an increase in demand for the week ended May 31, up from 9.03 million barrels per day to 9.07 million barrels. However, AAA spokesman Andrew Gross said this year’s “tepid gasoline demand” has fallen below the pace of recent years, cooling gasoline prices. Two factors counteracting rising demand are strong gasoline supply and stagnant oil prices. International benchmark Brent Crude has fallen over 4% to just under $80 a barrel in the past month, while West Texas Intermediate, a national benchmark, has held steady at just under $78 a barrel.

Contra

Only Colorado saw a rise in the price of gasoline last month. The average price rose three cents last month, to $3.23, despite falling 26 cents over the past year. Several states saw a slight rise in the price of gasoline year-over-year. In Georgia, it rose two cents (to $3.29), in Maryland, nine cents (to $3.53), and in Virginia, three cents (to $3.33). All three states saw only minor price declines last month.

Further information

ForbesGasoline price falls below $3.50 for the first time in three months, even as summer approaches – here’s why

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