Gas Prices Reach New Lows for 2012 — But They’re Still Pretty Darn High

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Hurray! Drivers are now seeing the year’s cheapest prices at the pump. Let’s not get carried away and actually declare these prices truly “cheap,” however.

When this week’s Energy Information Administration report came out on Monday, the national average for a gallon of regular stood at $3.25, representing a drop of nearly 10¢ in a single week’s time. Due to increased supply and a somewhat typical dip in seasonal demand, gas prices have plummeted nationally since autumn—in mid-October, the national average measured $3.82.

As MarketWatch and others noted, the $3.25 mark was the lowest gas prices had been for all of 2012. Prices have continued to drop since then, reaching $3.226 as of Wednesday, according to AAA’s Fuel Gauge Report. If pump prices decrease by a few more pennies, we’ll reach the lowest point drivers have seen in nearly two years, per a CNN Money report.

(MORE: Drivers May Get a Special Christmas Present: $3 Gas)

While the price decreases seem impressive—especially in places like Michigan, where gas was 18¢ cheaper than the previous week—and relief at the pump is very much welcomed at a time when Americans feel compelled to splurge on holiday gifts and parties, let’s put this all in perspective. The AAA Fuel Gauge Report not only offers current averages for states and the nation, but gives averages from one week, one month, and one year ago as well. And guess what the national average was one year ago at this time? Yep, the same as it is today: $3.22. (Actually, the December 19, 2012 average was listed at $3.226, so slightly higher than the $3.221 average from 12 months beforehand.)

The truth is that while we may be paying prices that are close to the lowest seen in around two years, we are also paying prices that are near all-time highs for this time of year. Considering how high gas prices remain from a historical perspective, the idea that a “gas price crash” has occurred is laughable, GasBuddy’s Patrick DeHaan wrote in a recent post:

While the drop certainly has been well noted by major media outlets who in some cases have been calling this a “gas price crash”, I’d like to take this moment to pop everyone’s balloon: gasoline prices still could set all time record highs for Christmas Day.

Regardless, because gas prices have been so much higher throughout the country very recently, drivers feel like they’re catching a big break, especially in places where prices have dipped below the magical $3 mark. The statewide average in Oklahoma and Missouri has already dropped under $3, and stations in certain parts of Nebraska, Texas, South Carolina, Tennessee, and other states are also selling regular gas at prices that start with $2, not $3.

(MORE: Sure Enough, 2012 Will Go Down as the Most Expensive Year Ever for Gas)

These prices may seem cheap, and they are undeniably cheaper than what drivers had quickly gotten used to paying throughout most of 2012. But from a historical perspective, these prices aren’t really cheap at all.