Gasoline Falls Below $3 While Electricity and Natural Gas Surge — Both Parties Claim an Affordability Win

Gas Prices Fall, Power Bills Rise — A Political Flashpoint

Gasoline prices have fallen to roughly $2.98 per gallon nationally, while household electricity and piped natural gas costs have climbed in many regions. The divergence has created two competing narratives: Republicans tout cheaper fuel at the pump, while Democrats and consumer advocates warn that rising power bills are squeezing families.

The Numbers At A Glance

According to the American Automobile Association (AAA), the national average gasoline price dipped below $3 per gallon, standing at $2.98 on Friday. Overall energy prices were up 2.8% in September compared with a year earlier — slightly below the 3.0% year-over-year rise in the consumer price index.

But energy components vary sharply: residential electricity prices rose about 5.1% year-over-year in September, and piped natural gas used by utilities was up 11.7% versus the prior September. Regional spikes are pronounced: New Jersey reported roughly a 21% year-over-year increase in residential electricity, and Washington, D.C., recorded about a 31% jump for the same period.

Why Prices Are Moving in Different Directions

Experts say several factors explain the split. Christopher Knittel, an MIT economics professor, observed that electricity prices have been increasing faster than inflation, while oil-related prices — including retail gasoline — have eased. "Which side matters more for a household depends on how much gasoline versus electricity the household uses," he said.

Columbia University energy researcher Ira Joseph pointed to supply-and-demand dynamics in the natural gas market: domestic gas production has not kept pace with rising U.S. demand, much of which comes from liquefied natural gas (LNG) exports. Cold weather earlier in the year also tightened supplies and pushed prices higher.

Who Feels It Most

Advocates for low- and moderate-income households say the recent electricity increases are painful because these families operate on very tight budgets. Mark Wolfe, executive director of the National Energy Assistance Directors Association, noted that rising electric bills are now being mentioned alongside food and housing as household priorities. "Many people think energy is energy," he said. "When gasoline gets cheaper but electricity doesn't, people ask why their electric bill isn't coming down too."

Visible, power-hungry uses such as data centers have become an easy target for public frustration, Wolfe added, though experts stress such uses are only part of the explanation. Utilities are also making costly investments to modernize grids and repair storm damage, which can raise rates.

Household Spending And Long-Term Trends

EPRI, an energy research and development institute, estimates that gasoline will remain the largest U.S. household energy expense in 2024 at about $2,930, compared with roughly $1,850 for electricity. Still, electricity prices have been rising for many years: Knittel cautions that long-term trends predate any single administration.

Politics And Policy

The price divergence has become a political talking point. President Trump celebrated lower pump prices at a recent Cabinet meeting, saying gasoline is "really low" and predicting it could fall further. Democrats, meanwhile, have criticized rising power bills; Sen. Ruben Gallego (D-Ariz.) warned that higher energy costs could lead to utility shutoffs and serious hardship this winter.

Policy choices are likely to push energy prices in opposite directions. Cutting environmental regulations on power plants could reduce costs, while eliminating renewable energy subsidies would likely raise them. Expanding LNG exports tends to remove supply from domestic markets, putting upward pressure on U.S. natural gas prices.

"Getting rid of the subsidies on renewables is going to put upward pressure on electricity prices," Knittel said, while also noting that reduced environmental rules for fossil fuel plants could offset some of that effect.

What To Watch

Outcomes for household budgets will vary by region and by how much a household relies on gasoline versus electricity. Policy changes, weather, global energy markets, and infrastructure investments will all influence prices going forward. For many vulnerable families, advocates say immediate relief programs and targeted assistance remain crucial.

Reporting based on data from AAA, EPRI, Columbia University, MIT, and public statements from policymakers and advocates.