According to AAA, the average gasoline price nationwide has dropped below $3 a gallon. That is welcome news for holiday travelers. Gas has not been this cheap since 2021.

What was up with 2021 gasoline prices?

President Joe Biden had a reputation as an EV advocate. So it may be surprising to find out how much he focused on gas prices. In 2021, the Biden Administration tapped the Strategic Petroleum Reserve to help lower fuel prices. He also met with U.S. oil companies and urged OPEC, all to begin increasing production. His administration worked with ports and other agencies to reduce supply-chain bottlenecks. It also directed the Federal Trade Commission to investigate potential gasoline price gouging.

What’s up with 2025 gasoline prices?

Runaway inflation caused by COVID caused gasoline prices to spike. In 2022, they peaked just under $5 a gallon. But they have fallen 43% since then.

President Donald Trump took office for the second time on January 2nd, 2025. The average gallon of gasoline in the U.S. was already down to $3.07. But the second Trump Administration still took two major steps aimed at furhter reducing fuel costs in the future.

It opened up a billion acres of land and water–which had previously been protected by the federal government–for future oil drilling. It also took steps to decrease production costs for oil companies, including eliminating environmental and efficiency regulations. According to the Department of Energy, the hope is that these savings will eventually trickle down to the pump.  

The average price of a gallon of gas in the U.S. has dropped 7% over the past month. It is now below $3 a gallon again.

Lower gasoline prices a welcome relief on American wallets

Inflation continues to strain household budgets elsewhere. The All-American Economic Survey found that 40% of respondents plan to spend less this holiday season than last year. That figure is up 6 percentage points year over year. Forty-six percent cited the high cost of goods as the primary reason they’re tightening the budget.

Relief at the pump should help offset some of that pressure. AAA predicts 122 million Americans will travel during the holidays this year. About 90% of them will drive. AAA expects 2025 to mark the cheapest December at the pump since 2020.

Not every state is seeing the same relief. Hawaii and California still average more than $4 a gallon. Oklahoma, by contrast, has dropped below $2.30.