Across the country today, 28 different states are now selling regular gasoline for under $ 2.00, on average. And yet the nationally averaged gas price, according to AAA, remains at $ 2.03. What’s up with that?
The answer — with the country on the cusp of $ 2.00 gas — is that it all lies in how you do the math.
AAA computes the iconic nationally averaged gas price based on data received from 100,000 stations each day, and what people using gas cards pay at those stations. Sometimes, the gas stations also give the data directly. So the analysis is considerably more complex than simply taking an average of all the state averages (an analysis that could become easily skewed by outlier states like Hawaii, where people are still paying $ 3.25 for regular gas!).
The result is that, even if 28 states are now averaging below two dollars per gallon, the national average can still be above $ 2.00 because of a few highly populous states with a lot of gas stations. In this case, California is still averaging $ 2.45, and New York is still averaging $ 2.44. Indeed, a number of highly populous states are still averaging above $ 2.00 today, including Florida ($2.08), Pennsylvania ($ 2.26), and North Carolina ($ 2.08).
However, Green explains, if you take the median gas station across the country and see what it’s charging, it’s actually below $ 2.00 right now. It’s actually at $ 1.98.
Or look at it yet another way. “60.61 percent of U.S. gas stations are selling gas for less than $2 per gallon,” says Green. “I personally find this statistic interesting. It means that 6 in 10 U.S. gas stations already are selling gas for less than $2 per gallon today.”
It might also mean that most Americans are already experiencing $ 2.00 gas. “I think you could definitely argue that point,” says Green. “We don’t have any data necessarily to confirm that.” After all, maybe a lot more people per gas station fuel up in New York and California.
In any event, if gas prices keep going down, it’s inevitable that pretty soon, we’ll all read headlines about how gas has dropped below $ 2.00 across the country. But as the foregoing logic suggests, it’s not like there’s a magic moment when suddenly, nationally averaged gas is below $ 2.00, whereas only a second before it was above it. Rather, it depends on how you do the analysis.
The upshot is that you probably shouldn’t fixate too much on the $ 2.00 marker. What’s much more significant is the fact that gas price declines have been simply overwhelming — and will save Americans a fortune this year.
“U.S. average gas prices have dropped $1.66 per gallon since April 28, 2014.” Green says. He adds: “What’s probably the most relevant fact for most consumers is that their price has dropped considerably.”