As the new year unfolds, gas prices across the United States have seen a significant decline. On January 1, 2026, the national average price for regular gasoline fell to $2.833 per gallon, making it 23 cents cheaper than the $2.839 recorded on New Year’s Day in 2025.
This latest figure marks a continued decrease from the prior week, when the average price stood at $2.847, and showcases a more dramatic decline from a month ago, when prices averaged $3.001. These figures indicate the lowest gas prices since the week of March 8, 2021, when gasoline was priced at an average of $2.771 per gallon.
Regional Price Variations
In the current landscape, 10 states boast average gas prices below $2.50 per gallon, while seven states report prices dipping below $2.45. Conversely, among the 11 states with gas prices exceeding $3 per gallon, significant disparities are evident. Notably, Hawaii retains the highest average price at $4.415 per gallon, followed by California at $4.266. Both states are currently the only ones in the U.S. with average prices above $4.
States like Iowa and Colorado lead with the lowest prices, recording averages of $2.37 and $2.376 per gallon, respectively. Other states with comparatively low prices include Arkansas at $2.41 and Texas at $2.437.
Trends Leading to Lower Prices
The journey to these reduced prices began in October, when national averages flirted with the $3 mark, starting at $3.16 on October 2. By the end of that month, prices had decreased to $3.04 per gallon. Throughout November, fluctuations kept prices below $3, and by late December, prices had broken the $2.90 barrier.
On Christmas Eve, prices dropped to $2.854 per gallon, and on Christmas Day, they averaged $2.847. As consumers welcomed the new year, these trends have left many relieved as they fill their tanks at more affordable rates.
According to the American Automobile Association (AAA), the consistent decline in fuel costs is attributed to various factors, including fluctuating demand and changes in crude oil prices. As these dynamics continue to play out, consumers are likely to keep a close eye on the market in the coming weeks.
The reduction in gas prices brings welcome news to many drivers and may have implications for broader economic activity as transportation costs decrease. As 2026 begins, the trend appears to be favorable for those relying on personal vehicles for daily commutes or long-distance travel.