The national average price for regular gas dropped again on Thursday, falling below the $4-per-gallon threshold to $3.999, according to AAA. It marked the fourth straight week that gas prices in the country have decreased. Fuel costs have dropped 52 cents per gallon over the last month. Thursday’s gas price decrease comes the day after the United States and Iran signed a memorandum of understanding to end their military conflict and reopen the Strait of Hormuz.
It is the first time the national average price for a gallon of regular gas has been below $4 since March 30. Gas prices began to drop across the country shortly after Memorial Day weekend, traditionally recognized as the start of the summer driving season, which usually correlates with higher prices at the pump. A few days earlier, gas prices reached $4.564 per gallon on May 21, a record high price for 2026, and the highest national average gas price in the U.S. since 2022. It was also the highest gas price since President Donald Trump took office in either term.
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On Jan. 12, 2026, the national average price for a gallon of regular gas dropped to $2.79, the lowest price in over five years. Fuel costs have fluctuated significantly in 2026, following a mostly steady, declining market in 2025. It’s been a whirlwind of gas price changes over the last few months, and no one seems to be sure what is next, as uncertainty around the Iranian conflict and hostilities in the Strait of Hormuz directly correlated with the national average price for a gallon of regular gas.
The signing of the peace deal between Iran and the U.S. on Wednesday and the opening of the Strait of Hormuz should lead to gas prices dropping even further. However, the unpredictability of gas prices in 2026 has been the most predictable thing about them. Expert analyses and predictions have been inconsistent, incorrect, and unreliable. Only time will tell whether gas prices ultimately decrease or start to increase again.
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One thing that has remained steady and will continue to do so is that fuel costs across the country tend to vary by region. One certainty, at least over the last three years, is that the states with the highest gas prices are on the West Coast. States with the most affordable gas prices have changed in recent weeks. After nearly two years in which Gulf Coast states had the nation’s lowest gas prices, the Midwest has now taken that distinction.
Gavin Newsom’s California has the highest gas prices in the country. On Thursday, the Golden State had a statewide average of $5.642 per gallon of regular gas. Next was Hawaii at $5.57 per gallon, followed by Washington at $5.436 per gallon. Alaska was next with a statewide average price of $5.042 per gallon, followed by Oregon, with a statewide average of under $5 per gallon for the first time in months, at $4.922 per gallon.
Meanwhile, Indiana has the lowest statewide average gas prices across the country. On Thursday, a gallon of regular gas in the Hoosier State averaged $3.399, incidentally a slight increase from last week but still the lowest gas pricing in the nation. Next is Texas with a statewide average of $3.493 per gallon. Oklahoma is next at $3.508, and then South Carolina at $3.582. Tennessee is next with a statewide average of $3.588.
