US gas prices fall below $4 a gallon for first time since March
TLE DESK: Average petrol prices in the United States have fallen below $4 per gallon for the first time since March, offering some relief to motorists despite fuel costs remaining significantly higher than a year ago.
According to the American Automobile Association (AAA), the national average price for a gallon of regular petrol stood at $3.999 on Thursday, reflecting a decline in energy prices following a tentative agreement between the United States and Iran.
The easing of tensions has helped lower crude oil prices after Washington and Tehran reached a deal that includes the resumption of oil exports and the reopening of shipping routes through the Strait of Hormuz.
Despite the recent decline, petrol prices remain around $1 per gallon higher than before the conflict with Iran began in late February and are approximately 25 per cent above levels recorded at the same time last year.
Economists say high fuel costs have weighed heavily on household budgets, forcing many consumers to cut spending on other goods and services.
“Research shows that short-term swings in fuel prices can affect not only driving habits but also broader household spending,” said Dylan Brewer, an economist at Georgia Tech.
The impact of higher energy costs has extended beyond petrol, contributing to rising prices for groceries, air travel and a range of consumer goods amid supply chain disruptions linked to the conflict.
Analysts warn that although oil prices have fallen sharply in recent weeks, many of the inflationary pressures created during the war are likely to persist for months.
Pat Penfield, a supply chain specialist at Syracuse University, said higher costs for fertiliser and transport are expected to continue feeding through into food prices later this year.
Fuel prices continue to vary widely across the country. California recorded the highest average price at $5.64 per gallon, followed by Hawaii at $5.57. In contrast, motorists in Texas and Indiana were paying around $3.49 and $3.40 per gallon respectively.
The recent decline in pump prices has been driven largely by falling crude oil costs. Brent crude dropped below $80 a barrel, while US benchmark crude fell below $76 a barrel, both significantly lower than the peaks reached during the conflict.
Oil markets reacted positively after President Donald Trump signed an interim agreement with Iran that allows Tehran to resume oil exports and begins negotiations on the future of its nuclear programme.
Shipping activity through the Strait of Hormuz has also started to recover, although industry experts caution that it could take weeks or months before global oil flows return to pre-war levels.
While lower oil prices are expected to provide further relief at the pump, analysts note that refineries often purchase crude weeks in advance, meaning reductions in fuel costs may take time to reach consumers.
