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Takeaways
- Gas prices have dropped in recent weeks, and are now about 50 cents cheaper than they were last year at the same time.
- Forecasters expect a decline in fuel demand due to the volatile market swings, and the declining consumer sentiment that is caused by tariff uncertainty.
- The supply is also expected increase, which will contribute to the downward pressure on prices.
Prices for one expense have dropped as a result of President Donald Trump’s tariffs.
Gas prices have fallen in recent weeks. This is contrary to the usual seasonal trend that sees gas prices rise during the spring travel period. After President Donald Trump announced “reciprocal tariffs”, on April 2, oil prices dropped sharply, and fuel prices followed suit. Gas prices are now half a cent cheaper than they were last year.
According to AAA, the average price of a gallon on April 23 was $3.17. According to Patrick De Haan of GasBuddy, the head of petroleum analysis, this is a significant reduction from the $3.67 per gallon average price at this time last year. This translates into a daily savings of $200,000,000 for drivers.
What’s Driving Gas prices Lower?
The drop in gas prices is due to a few factors, both of them involving oil. Gasoline is made from crude oils, so the price of auto fuel will usually follow the trend of crude oil.
Investors can now be confident that fuel supplies will continue to be plentiful after oil-producing nations pledged recently to increase their production levels. The Organization of the Petroleum Exporting Countries (OPEC+) announced a 411,000 barrel a daily production increase in April. This exceeded expectations.
Uncertainty around tariffs also undermines confidence in economic growth, as consumer sentiment has declined to near historic lows. Forecasters worry that shoppers will spend a smaller amount on travel and other activities which lead to the consumption of gasoline. Last week, International Energy Agency reduced its projections of oil demand growth in this year and the next year, citing the toll that the escalating tariff war caused by Trump’s policies has taken on the global economic system.
De Haan stated that “2025 has so far been relatively calm for most Americans at the gas pump, thanks to OPEC’s ongoing production of oil and the continued uncertainty around tariff policy and the potential impact on global economy,” De Haan explained.
