Will Labor Day Travelers See Lower Gas Prices?

• The national gas price average is $3.81 as of Monday, August 28, registering a slight uptick over the past month as demand remains strong.
• The western states continue to see higher average prices for gasoline, including states like California, Oregon, Hawaii, Washington, and Alaska.
• The Atlantic hurricane season could once again cause disruptions to refinery operations, already dented by several weeks of high heat in the summer.

The last major travel holiday of the season is coming up, after one of the busiest summers for travelers in quite a few years. And despite the high demand, the past three months have seen much more favorable gas prices than the same period in 2022.

But will this trend hold through the next couple of weeks?

The good news is that crude oil prices have backed off some of the summer highs, and are sitting below the $80 mark.

Still, a very hot summer has already contributed to gasoline production slowdowns along the Gulf Coast, delivering tighter supply than we’ve seen in months.

AAA notes that the current gasoline price average is $3.81 a gallon, as of August 28, or about a quarter of a dollar higher than during the last week of July. The current average is also almost identical to the one observed during this time in 2022, which saw much more extreme gasoline price highs on a season-long basis, reaching the $5.00 mark in mid-June.

The bad news is that the Atlantic hurricane season is still ahead, after weeks of record sea temperatures in the Gulf of Mexico and along the Florida coast—an element that can fuel stronger tropical storms and hurricanes. The Atlantic hurricane season has been known to produce regional gas shortages even in instances when hurricanes themselves do not deal a direct hit to refineries along the Gulf Coast, so the course is far from clear.

“Ongoing concerns regarding potential storm activity could hinder falling pump prices this fall,” Andrew Gross, AAA spokesperson, said on August 24.

Speaking of storm activity, tropical storm Idalia is already expected to complicate things for travelers in Florida, Georgia, and the Carolinas later in the week, with the storm projected to become a major hurricane.

While the national gas price average remains at a bearable level for now in most of the country, some states and metro areas are averaging well above the $3.81 mark and have been for some time.

California continues to lead the list of the top 10 most expensive markets with a $5.26 a gallon average, as of late last week, with Washington state in second place at $5.06 a gallon. Hawaii was in third place last week at $4.78 a gallon with other western states, including Alaska, rounding out the top 10.

As every year, Labor Day travelers are bound to see some of the heaviest traffic during the afternoons of the last two work days of this week.

“Most travelers will leave on Thursday or Friday before Labor Day to take advantage of the long holiday weekend,” said Paula Twidale, senior vice president of AAA Travel. “Domestically, the Pacific Northwest, big cities like New York and Denver, and tourist hotspots like Orlando and Las Vegas are the most popular. Internationally, it’s all about Europe and Canada.”

If there is one more trend to note, it’s the fact that gas prices in 2022 did not decline after Labor Day, even though June and July saw the highest peaks when it came to prices at the pump. Last year the national gas price average climbed close to the $4.00 mark in mid-October, after falling for most of July and August. A similar trend was noted in 2021.

So Labor Day is not always the point after which prices will start to decline sharply as fall approaches, even though it has traditionally been the last major driving holiday of the summer season.