Gas Prices Hit Record Highs for August Nationally, Alabama Still Below Average

The three-day Labor Day weekend is just ahead. Traditionally, the holiday pushes U.S. gas prices upward, and all indicators point to this year being no different when you combine holiday travel with the ongoing significant reduction in the flow of oil through the Strait of Hormuz.

National gasoline prices already this month have officially set a record as the most expensive, on average, ever for the month of August. AAA lists the national average on this last day of the month at $4.08 a gallon.

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The previous record for August gas prices hit $3.83 a gallon on August 22, 2022. That is when the national average briefly surged upward following the beginning of the Russia-Ukraine war and lingering pandemic-era supply shocks.

Today, the most expensive state in which to purchase a fill-up is California at $5.69 a gallon. Washington state is not far behind at $5.32 a gallon.

The news in Alabama is not quite as dire. AAA's current price at the pump in the Yellowhammer State is listed at $3.69 a gallon. That is a drop of 4 cents from a week ago and 7 cents from the $3.73 a gallon averaged a month ago in July.

Whatever the national price, gasoline in Alabama is generally lower than the national average due to several factors.

1. Lower state fuel taxes
2. Proximity to Gulf Coast refineries
3. Access to the main distribution line for Colonial Pipeline
4. No special environmental fuel blends are required
5. Lower retail operating costs
6. Price competition along Interstate Highways 10, 20, 59 and 65

In West Alabama, Walker County's $3.63 a gallon is the cheapest in the 11-county region. Perry County remains the most expensive at $3.93 a gallon. The average in Tuscaloosa County is $3.67 a gallon.

Depending on what transpires in the Middle East conflict, the U.S. Energy Information Administration's forecasted September Energy Outlook calls for across-the-board decreases due to the end of the summer driving season, the end of the summer fuel grade requirements and crude oil prices falling. Those factors are expected to create a 41-cent drop to end the third quarter next month.

The national prediction of $3.75 to $3.85 a gallon aligns with Alabama's forecast for a 40-to-70-cent decrease to $3.25 to $3.40 a gallon.

The caveat to the predicted lower prices is still the nation's ongoing conflict in Iran, which heated up again over the weekend as both sides reportedly traded strikes after a month of relative quiet.