Economy

US Gas Prices Fall Below $3 in December, Marking Four-Year Low for the Month

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Dec 23, 2025

THE BARE STORY

Gasoline prices across the United States have fallen during the 2025 holiday season, with the national average for a gallon of unleaded fuel remaining below $3.00 for most of December. The current national average is approximately $2.86, which is more than 18 cents lower than the same time last year and 21 cents cheaper than a month ago. Both sources indicate this is the cheapest December for gasoline since 2020.

According to the motor club AAA, the price drop is due to strong fuel supply and mild crude oil costs. AAA stated that West Texas Intermediate crude oil has traded below $60 per barrel for much of the month. The lower fuel prices coincide with a forecast from the organization that over 122 million Americans will travel at least 50 miles from home between December 20 and January 1, with nearly 110 million expected to do so by car.

Significant price variations exist between states. AAA reported that on Tuesday, Hawaii had the highest average price at about $4.44 per gallon, followed by California at $4.30. In contrast, Oklahoma had the lowest average at approximately $2.30 per gallon.

The relief at the pump comes amid broader economic concerns. The Conference Board announced that its consumer confidence index fell in December to its lowest level since April. In addition, a survey indicated that over 40% of respondents planned to reduce their holiday spending, with many citing the high cost of goods. While government data showed inflation cooled to 2.7% in November, some economists have reportedly warned the figures may be unreliable due to a recent 43-day federal shutdown.

Same Facts. Different Perspectives.

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• Consumer confidence has fallen despite the lower gas prices. An index measuring consumer confidence dropped in December to its lowest level since April. This decline suggests that the relief at the pump has not been enough to offset broader pessimism about the economy.

• A significant portion of the public plans to reduce holiday spending. A recent survey indicated that over 40% of respondents intended to cut back on their holiday expenditures, with many citing the high cost of goods as the reason. This suggests that financial pressure from other areas is outweighing the savings on gasoline.

• Economists have raised doubts about the reliability of recent positive inflation data. While government figures showed inflation cooling to 2.7% in November, some economists have reportedly warned these numbers may be unreliable. This skepticism stems from a recent 43-day federal shutdown, creating uncertainty about the true state of inflation.

How it may affect me

As a U.S. reader:

• Holiday travel by car may be less expensive, as national average gas prices have reached a four-year low for the month of December.

• Your personal savings on fuel will depend heavily on your location, with average state prices differing by more than two dollars per gallon.

• Savings on gas may not boost the economy, as many people still plan to reduce holiday spending due to the high cost of other goods.

• The true state of inflation is uncertain, as some economists question the reliability of recent government data following a long federal shutdown.

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