Just two days earlier, AAA pegged the national average price for regular gasoline at $3.79 per gallon—a full 50 cents more.
It’s such a huge difference that one might wonder if the number could be wrong or taken out of context. It’s not, provided you take it literally: it’s not average. This is the actual price displayed at more gas stations in the country than any other price.
This statistic comes from GasBuddy, a gas-price app that has emerged as a popular commentator and data provider on gas-price trends. While gas prices are a major issue in midterm elections, it’s worth exploring how the price can vary depending on whether you specify average, median (half stations charge more, half charge less) or mode—most common. , which the Biden administration cites.
Patrick de Haan, head of petroleum analysis at GasBuddy, said, “no one is right or wrong,” referring to the various measures of specific gas prices. “There are other angles to the story” that represent mean, median and mode, he added.
For the Biden administration, the most common price appeal may simply be that it is lower than the national average. In August, a Politico newsletter quipped that Mr De Haan had become “Biden’s gas friend” because of the administration’s tendency to share his tweets once gas prices began to drop.
GasBuddy’s data is from its app, which displays a map to find the best local gas prices, and prompts users to update them as prices change. GasBuddy also collects data from gas stations that sign up for its business pages, which allows them to enter their pricing directly, and from users of its gas cards, ultimately from more than 100,000 stations in the US. Pulling data for most of it.
(In 2021, GasBuddy briefly became the No. 1 app on the entire US App Store after a cyber attack on the Colonial Pipeline sparked panic buying gasoline and many gas stations ran out of gas altogether. Remember ? I forgot about it during the time warp of the pandemic.)
GasBuddy calculates an average that isn’t much different from AAA. The Automobile Association gathers its data through a partnership with Oil Price Information Service, an energy-data and analytics provider that is part of News Corp’s Dow Jones, publisher of The Wall Street Journal.
On October 3, GasBuddy averaged $3.78 while AAA said $3.79. Not an interesting difference. More interesting were the ones reported by GasBuddy, at $3.49, and the Mod, at $3.29.
The mode is actually more general than the random probability one can predict. It is often available at thousands of gas stations in many areas at once, Mr. De Haan said. This is because prices tend to cluster around key psychological points. For example, for six consecutive weeks in March and April, the most common price was $3.99 as several stations attempted to hold the line as against $4.
The average, in contrast, isn’t encountered very often because it’s skewed by ultrahigh prices in one state: California. This fall, while many drivers were seeing gas in the low $3s, prices in California rose from $5.21 on September 6 to $6.31 per gallon by October 10, a jump due to refinery closures.
“When California has problems with refineries that drive up prices, it can skew the national average,” Mr. de Haan said. Because the median and mode are unaffected by California’s unusually high prices, they are “slightly more relevant”. They said.
California’s higher prices are partly due to higher taxes, an underground-storage-tank fee, a carbon offset, and cleaner-burning requirements. But those factors only add up to 85 cents per gallon, according to calculations by Severin Borenstein, a professor of economics at the University of California, Berkeley. Gasoline costs $2 more per gallon in California than elsewhere.
“This latest spike, which was not in line with the increase in the rest of the country, really indicates that something very different is happening in California,” said Mr Borenstein, who called this vague distinction a “mysterious gas surcharge.”
This is a relatively recent phenomenon. Before 2015, the gap between gas prices in California and the rest of the country could be explained by environmental regulations and taxes.
In February 2015, an explosion at a refinery in Torrance, Calif., caused prices to rise in the state, but they never returned to normal.
The result is that the national average gas price is falling rapidly by California. By itself, California raises about 20 cents on average. Mr. Borenstein calculated the latest national average excluding California at $3.53, just a few pennies from GasBuddy’s new estimate: $3.49 as of October 24.
But the average matters. Californians are still Americans. When it comes to the economic toll from gas prices and inflation, prices in California matter a lot: California’s November midterm elections are also a race for a tossup.
In its figures released on Monday, GasBuddy put the most common price at $3.49. If that number turns out to be true, it probably says something about where you live. The most common price is currently something you can find in the Northeast and Mid-Atlantic, in the Great Plains, and in the northern parts of the South.
And remember, Mr. Borenstein said, “most people don’t see any of that” discussion of gas-price figures. “They just feel it when the price changes in their station or neighborhood.”