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- The cost of filling up your car’s tank is high this week, but there are already signs that this current spike might be short. GasBuddy noted on Wednesday that prices were “plummeting” by between six and 12 cents a gallon.
- That may be true, but people who are reporting their local gas-station prices are getting warning messages from the GasBuddy app asking if what they’re reporting is correct. 
”This price seems high,” the app says. Ya think?
- In the past, gas price spikes like this were followed by an increase in sales of hybrids and plug-in vehicles. Whether that pattern holds is something we won’t be able to answer for a few months, but Recurrent CEO Scott Case thinks car buyers won’t soon forget the high prices that gasoline can bring.
After shooting up sharply in the last week or so, gas prices in the U.S. have plateaued and, in some areas, have already started going down. On Wednesday, the Energy Information Administration (EIA) said so, even though crude oil and gasoline inventories were down this week. The Wall Street Journal reported that Brent-crude futures, the international benchmark for petroleum prices, dropped 13 percent Wednesday, the biggest single-day percentage decline since April 2020. If nothing else, oil and gas prices are in flux these days thanks to external factors that no single group has control over. The photo above, taken at a downtown Los Angeles gas station on March 9, 2022, is an example of what can result.
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When it comes to the cost at the pump here in the U.S., Patrick De Haan of the gas price tracking site GasBuddy said Wednesday morning that there was “excellent news” of gas prices “plummeting” down between six and 12 cents a gallon, depending on location. GasBuddy’s map showing current station price reports from gas stations across the nation shows plenty of yellow and orange (the map’s highest prices, anything over $4.43 a gallon), especially on the West Coast, Illinois, and the Northeast.
On Twitter, people are posting screenshots of their GasBuddy app which is automatically popping up a window to confirm the high prices people are entering. “This price seems high. Are you sure this price is correct?” the app asks, and De Haan responded to at least one of the Tweets by saying this is “how you know it’s really bad.” If you have a particularly notable price to share from your neck of the woods, please let us know in the comments.
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As we recently reported, the average price of gas in the U.S. recently hit $4.17 a gallon, the highest number ever recorded. What’s important to know, though, is that we are not living with the highest gas prices ever. The previous record of $4.10 was set back in 2008, but when adjusted for inflation, that would actually be about $5.37 in today’s dollars, according to NPR. Meanwhile, even where it’s not extreme, prices are still well above what people have grown accustomed to. GasBuddy reported this morning that the cheapest average gas price in the U.S. is Fort Smith, Arkansas, where it is $3.71, and the cheapest state is Kansas, averaging $3.82 per gallon.
What these high gas prices might mean for auto sales poses two big questions. First, if prices are already starting to slide, then will anything really change? Second, if prices continue to climb—the GasBuddy app predicted over the weekend that we might see a national average of $4.25 per gallon by Memorial Day—will that shift purchase patterns to more efficient vehicles? According to the EIA, that’s more than likely. Since 1999, sale of hybrid and plug-in vehicles has tracked with gas prices, with electric vehicles becoming especially popular in the last three or four years as options have grown.
“Gas prices rise and people respond immediately by buying more hybrid vehicles with better fuel efficiency,” said Recurrent CEO Scott Case in a statement. “Unfortunately, you’ve also seen that the opposite has been true as well: when gas prices have fallen over that period, hybrid sales have fallen. Rationally, this doesn’t make much sense because an inefficient new-car purchase lasts a lot longer than low gas prices.”
Case said that it will be interesting to see if we will “breach a psychological tipping point” if gas prices climb to $5 or more. Some analysts are predicting that gas prices will continue to rise, he said, and if they keep going, that’ll have an impact.
“You can’t unsee the $5 or $6 per gallon gas prices,” Case told Car and Driver. “The next time that people walk into a car dealership, they are going to remember it. The question is whether or not that translates to immediate EV sales, since sales are a lagging indicator of interest. This is especially true given the low inventory and long wait lists. We won’t be able to see how many people add their name to a new EV wait list this week or, in other words, commit today to switching to electric in the future. I have a feeling that if people could get the car that they want right now, we would see EV sales surge by five times.”
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