Gas Prices Hit Four-Year Lows as Millions Take to the Roads for Holiday Travel

As millions of Americans pack their suitcases and prepare for the 2025 year-end holiday season, they are receiving an unexpected gift at the pump. For the first time in over four years, gasoline prices have plummeted to levels not seen since the height of the pandemic recovery.² This significant drop in fuel costs is arriving at a pivotal moment, as record-breaking numbers of travelers take to the nation’s highways to visit family and friends.³ While inflation has remained a point of concern for many households throughout the year, the current downward trend in energy costs is providing a much-needed financial cushion for the holiday travel surge.

The Historic Shift in National Averages

According to recent data from AAA and GasBuddy, the national average for a gallon of regular unleaded gasoline has dipped below the $3.00 milestone, settling near $2.86.⁵ This figure represents a sharp decline from previous years and marks the cheapest December for motorists since 2020.⁶ In many regions of the country, particularly across the Gulf Coast and the Midwest, drivers are finding prices well below $2.50 per gallon.⁷ This shift is remarkably different from the volatile price spikes witnessed in 2022 and 2023, offering a sense of stability for those planning long-distance road trips over the 13-day holiday period.

Factors Driving the Decline at the Pump

The current relief at the pump is the result of a “perfect storm” of economic factors. Primary among these is the sustained drop in crude oil prices, with West Texas Intermediate (WTI) trading in the range of $58 to $60 per barrel for much of December.⁸ Global supply remains robust, bolstered by record-breaking production in the United States and steady output from international partners.⁹ Additionally, the completion of seasonal refinery maintenance has allowed for a steady flow of gasoline into the market.¹⁰ Even as demand spikes due to holiday travel, the sheer volume of available domestic supply has been more than enough to keep prices on a downward trajectory.¹¹

Record-Breaking Mobility on the Roads

Low fuel prices are acting as a catalyst for what is expected to be the busiest holiday travel season on record.¹² AAA projects that approximately 122.4 million Americans will travel 50 miles or more from home between December 20 and January 1.¹³ Out of these travelers, nearly 90%—roughly 109.5 million people—will be reaching their destinations by car.¹⁴ The convenience of driving, combined with the lowest gas prices in years, has made road trips the preferred mode of transport, even as airfares see a slight uptick.¹⁵ This surge in mobility is a testament to the resilient desire for connection during the holidays, made easier by more affordable fuel.

Regional Price Variations Across the Country

While the national average is reaching historic lows, the cost of gas still varies significantly depending on the state. Southern states like Oklahoma and Texas are currently enjoying the lowest rates in the nation, providing a massive advantage for local commuters. Conversely, West Coast states and remote islands continue to face higher costs due to stricter environmental regulations and logistical challenges. Despite these regional differences, almost every state has seen a double-digit decrease in prices compared to the same timeframe last year, ensuring that the holiday spirit remains high regardless of the destination.

Economic Impact on Holiday Spending

The savings found at the gas station are trickling down into other sectors of the economy.¹⁶ With motorists saving an estimated half a billion dollars collectively during the Christmas week compared to last year, that extra disposable income is being diverted toward retail, dining, and holiday entertainment.¹⁷ Small businesses located along major highway corridors are seeing increased foot traffic as more families choose to drive rather than fly. This boost in consumer spending is helping to offset some of the inflationary pressures felt in other categories, such as groceries and gifts, creating a more balanced holiday budget for the average American household.¹⁸

Looking Ahead to the New Year

As we move into 2026, energy analysts remain cautiously optimistic. While seasonal demand usually drops in January, which could push prices even lower, global geopolitical factors and potential changes in production levels by OPEC+ remain the “wild cards” of the market. However, for the millions currently navigating the nation’s interstate systems, the present reality is one of welcome relief. The 2025 holiday season will likely be remembered not just for its record-breaking crowds, but as the year when the cost of the “great American road trip” finally became affordable again.

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FAQs

Q1: Why are gas prices so low despite high holiday demand?

High gasoline production and a surplus in crude oil supply have outweighed the temporary spike in holiday travel demand.19 Additionally, lower global oil prices have kept the cost of production down.20

Q2: Which states currently have the cheapest gas?

Oklahoma, Arkansas, and Texas are currently reporting some of the lowest gas prices in the nation, with many stations offering fuel well below the $2.50 mark.21

Q3: Will gas prices stay low after the holidays?

Historically, gas demand drops in January and February, which often leads to further price declines. However, this depends on global oil market stability and refinery activity.

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