Michigan gas prices drop below $3 a gallon

Gas prices in Michigan have dropped to a new low in 2023, at an average of $2.96 for regular unleaded gas, according to AAA- The Auto Club Group.

The price is 15 cents cheaper than last week's, 35 cents less than this time last month and 12 cents under this time last year. Motorists are paying an average of $44 for a full 15-gallon tank of gasoline.

According to a Monday statement, AAA says lower oil prices have pushed prices lower, although higher demand usually pushes pump prices higher.

"Oil prices increased after the US Federal Reserve announced that it plans to hold interest rates steady through the end of the year and potentially reduce rates up to three times in 2024. The market had been concerned that the economy could tip into a recession if interest rates kept increasing. Oil demand and prices would likely decline if a recession occurred. Additionally, the EIA reported that total domestic commercial crude inventories decreased by 4.3 million bbl to 440.7 million bbl," the release stated.

AAA added: "With more than 3 million Michigan residents planning to drive to their holiday destinations, AAA expects road travel to be the second highest on record after 2019. Drivers can expect to pay about the same or less for a gallon of gas than they did last holiday season, when the Michigan average on Christmas Day and New Year’s Day was $2.99 and $3.19, respectively."

Oil and refined products analyst Patrick De Haan tweeted Saturday that more than 30 states have gas prices below $3.

AAA reports the most expensive gas price averages are in Marquette ($3.18), Jackson ($3.11) and Ann Arbor ($3.04). The least expensivegas price averages are in Traverse City ($2.87), Benton Harbor ($2.88) and Flint ($2.89).

"As the state average drops below $3 a gallon, Michigan motorists are seeing the lowest gas prices so far this year," Adrienne Woodland, AAA's spokesperson, said. "If oil prices remain low, drivers can expect pump prices to do the same during the holiday season."

Metro Detroit’s current average is also below $3, at $2.97 per gallon. That is about 12 cents cheaper than last week’s average and3 cents lessthan this same time last year.

mjohnson@detroitnews.com