Gas prices remain at their highest level in 4 years headed into July 4th weekend

This year’s Fourth of July is shaping up to be the most expensive at the pump in four years.

On Wednesday, the national average for a gallon of gas stood at $3.84, according to AAA data.

That’s down $0.52 from a month ago but still higher than Fourth of July prices over the past three years. It remains well below the record average of $4.80 a gallon reached in 2022.

Gas prices have fallen by nearly $0.02 per day over the past several weeks, leaving Americans spending about $300 million less on gasoline each day than they were roughly 40 days ago, according to Gasbuddy data.

“Looking at the decline, it’s actually a faster decline than what we saw in 2022,” Patrick De Haan, head of petroleum analysis at GasBuddy, told Yahoo Finance this week.

“To see 38 states back below the $4 gallon mark just in time for July Fourth is certainly terrific news,” he added.

The cost of driving fuel has been falling as oil prices have declined, with Brent (BZ=F) futures dropping below $72 per barrel, erasing its entire war premium. The decline came after the US and Iran signed a recent agreement to suspend the conflict in the Middle East and reopen the Strait of Hormuz.

“Maybe if everything goes well, gas prices could be in the low to mid $3 range by the time that Labor Day rolls around,” said De Haan.

Lower gasoline costs are expected to benefit lower-income consumers, who have been struggling with a reacceleration of inflation in the months following the outbreak of the Middle East conflict.

Bank of America noted in a recent report that around half of lower-income households describe their finances as “poor” or “terrible.”

“However, in our view, lower gasoline prices, combined with higher deposits, could be a mild tailwind to narrowing the ‘K’ shape in spending growth,” noted the researchers.