Gasoline prices in the U.S. have eased for the holidays, with AAA naming December the cheapest month so far this year and the national average briefly dropping to about $2.85 per gallon. State averages vary from roughly $4.44 in Hawaii to about $2.30 in Oklahoma. Ample supply and subdued crude oil (WTI below $60/barrel) helped lower pump prices, offering some relief even as inflation remains above the Fed’s target and consumer confidence weakens.
Holiday Relief at the Pump: U.S. Gas Prices Fall to Lowest December Levels Since 2020
FILE - A motorist fills up the tank of a vehicle at a gasoline station Sunday, Nov. 30, 2025, in Littleton, Colo. (AP Photo/David Zalubowski, File)
This holiday season, many U.S. drivers are benefiting from noticeably lower gas prices at the pump. Data from the motor club AAA show December has been the cheapest month for fuel so far this year, with the national average for regular unleaded falling below $3 per gallon on Dec. 2 and dipping to about $2.85 a gallon on Monday.
The national average ticked up only slightly to roughly $2.86 a gallon on Tuesday, and drivers planning holiday travel ahead of Christmas should still find relatively mild prices overall.
Regional Differences
State averages vary significantly because of factors such as nearby refinery capacity, transportation costs, and state fuel specifications. AAA reported that Hawaii had the highest average at about $4.44 per gallon, followed by California at $4.30 and Washington at $3.92. At the low end, Oklahoma averaged about $2.30 per gallon, with Arkansas and Iowa near $2.42.
Why Prices Are Lower
Cheaper pump prices this month reflect ample gasoline supply and relatively subdued crude oil prices. West Texas Intermediate (WTI), the U.S. crude benchmark, stayed below $60 per barrel for most of December, helping to ease costs along the fuel supply chain.
Context And Consumer Impact
Nationwide, unleaded gasoline is more than 18 cents cheaper than at this time last year and about 21 cents lower than a month ago. AAA notes these figures make this the least expensive December for gas since 2020, when the COVID-19 pandemic sharply reduced demand.
Lower fuel costs provide welcome relief for households facing higher expenses on groceries, gifts and other goods amid persistent inflationary pressure.
Government data showed consumer prices rose 2.7% year over year in November, a cooling from prior months but still above the Federal Reserve’s 2% target. Economists cautioned November’s data may contain distortions related to reporting delays tied to a 43-day federal shutdown. Meanwhile, consumer sentiment remains fragile: the Conference Board reported its consumer confidence index fell in December to its lowest level since April.
Bottom line: Drivers planning holiday travel are likely to find cheaper fuel than in recent months, though prices vary widely by state and broader inflation and economic uncertainty continue to affect household budgets.
