Expert Says Gas Prices Could Fall Below $4 Soon

Expert Says Gas Prices Could Fall Below $4 Soon

The prospect of a peace deal in Ukraine is just one factor that could lead gas prices to return to lower levels in the weeks to come.

Millions of Americans have been hard hit by rising gas prices, which have surged by roughly 30 percent since the start of the year.

But relief could be on the horizon, according to one industry expert.

Although it is nearly “impossible to tell what will happen,” the “odds are rising, however, that we're heading back under $4,” Patrick De Haan, head of petroleum analysis at GasBuddy, told Fox Business.

But he added that projection could “easily change” due to the volatile nature of oil prices.

Peace talks between Russia and Ukraine could have a sizeable impact.

“If there's peace, we're heading back under $4,” De Haan said. But if the conflict intensifies, “it could boost prices.”

He also touched on the potential effects of rising coronavirus cases in China. “It will prompt more lockdowns and demand destruction for oil,” he said, adding that oil prices will rise again if the outbreak is contained somewhat quickly.

Relief Already Here in Some States

Despite the pandemic and geopolitical tensions, more Americans are seeing at least some relief from high gas prices.

As reported by CBS News, “there are a few locations where drivers are getting some breaks and seeing prices fall—largely due to lawmakers who have suspended gas taxes in their states.”

Maryland and Georgia have already slashed gas taxes. According to AAA data, gas prices in Georgia have plummeted by about 32 cents per gallon in recent weeks, while Maryland drivers have seen even bigger cost savings of 41 cents per gallon.

More states could be on the fast track to easing the financial burden of high gas prices. Connecticut has passed legislation that suspends its gas tax, but that doesn’t go into effect until early next month. A group of Democratic lawmakers in West Virginia are asking Gov. Jim Justice to call a special session to suspend the state’s 36 cents per gallon gas tax for a month, while Republicans in Ohio have introduced legislation in the state senate that aims to temporarily cut the motor fuel excise tax rate by roughly 10 cents per gallon for five years.

Could Gas Tax Cuts Backfire?

However, despite the intentions of the tax breaks, such bills could potentially drive up gas prices even higher in the long run due to increased demand.

“It lowers costs at the retail level, but it insulates motorists from the true reality of prices,” De Haan told CBS News. “The consensus is that lowering the taxes is a direct benefit to the consumer, and that direct benefit can increase gasoline consumption.”

Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.