Gas prices stay low at the start of the new year: AAA
Gas prices expected to remain steady in near future
Prices fell by just two cents this week, according to AAA's latest report. (iStock)
This week, gas prices hovered at just over $3 per gallon, remaining on the lower end at the start of 2024.
The national average gas price fell by two cents to $3.07 this week, according to a AAA report. This average gas price shows the continuation of a downward trend as $3.07 is eight cents less than last month and 19 cents less than last year.
"I wouldn’t bet the farm on the national average reaching $3 a gallon, even if we are tantalizingly close," AAA spokesperson Andrew Gross said in the association's report. "The mid-winter blahs will likely keep pump prices waffling a few cents up and down for the immediate future. But keep an eye on frigid temps because those can affect refinery production, pushing some regional pump prices higher."
Prices languish due to a slightly higher demand, limiting price drops at the pump. AAA’s report cites Energy Information Administration (EIA) data that shows gas demand increased from 7.95 to 8.33 million barrels per day, up from last week.
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Some states see larger changes than others
Not all states are equally affected by the fluctuating gas prices. These 10 states saw the largest changes in their average gas prices, according to AAA data.
- Indiana (+14 cents)
- Ohio (+13 cents)
- Arizona (−11 cents)
- Florida (+10 cents)
- California (−10 cents)
- Nevada (−9 cents)
- Colorado (−9 cents)
- Michigan (+8 cents)
- Oregon (−8 cents)
- New Mexico (−8 cents)
While the national average is $3.07, some states are lucky enough to average prices much lower than this. These 10 states are the least expensive places to fill up your tank.
- Oklahoma ($2.59)
- Arkansas ($2.62)
- Missouri ($2.63)
- Mississippi ($2.66)
- Wisconsin ($2.66)
- Kansas ($2.67)
- Texas ($2.67)
- Colorado ($2.70)
- Louisiana ($2.74)
- Tennessee ($2.75)
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Auto insurance premiums jump by over 20%
Auto insurance premiums haven’t had the same luck as gas prices. The cost of car insurance rose by 20.3% in 2023, according to data released by the U.S. Department of Labor.
Rising premiums can be attributed to numerous factors, one of which is the substantial loss the insurance industry has faced in recent years. This loss arises mainly from the increase in natural disasters which led to a greater number of claims. Weather-related events accounted for over $90 billion in losses for the auto industry, according to A.M. Best’s 2023 report.
Supply-chain issues also caused the price of vehicles to rise substantially during the pandemic, leading to higher payouts for insurance companies when owners filed claims. Also largely due to the pandemic, rate increases were put on pause, so now premiums are creeping up to make up for this delay.
"A lot of the big rate increases were kind of delayed from 2020 on to 2024, and then ultimately we're seeing those now," USAA Advice Director Sean Scaturro said.
Another culprit for rising premiums is the increase in vehicle thefts. In the first half of 2023, close to 500,000 vehicles were reported stolen, a 2% increase from the first half of 2022, the National Insurance Crime Bureau (NICB) reported.
"Vehicle thefts increased to near-record highs in the United States last year, and unfortunately, current trends indicate total thefts this year may surpass 2022," said NICB President and CEO David Glawe. "With little deterrent to stop these criminal actors, law enforcement agencies and communities will continue to suffer."
A rise in theft also leads to more insurance claims, which auto insurance companies struggle to keep up with. In response, they raise rates for drivers.
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