U.S. gasoline prices tumble to start 2026

SOUTHAVEN, Miss. — American motorists are finding a reason to celebrate this new year as gasoline prices across much of the United States have plummeted to their lowest levels in years. According to the latest data from AAA, the national average for a gallon of regular unleaded has settled at $2.81, with over 40 states now reporting averages well below the $3.00 threshold.

The relief is most palpable in the South and Midwest, where a combination of high domestic supply and lower seasonal demand has driven prices to levels not seen since the early 2020s. Oklahoma currently boasts the lowest prices in the country at an average of $2.22 per gallon, followed closely by Iowa at $2.33 and Colorado at $2.35.

DeSoto County Drivers See Significant Savings

In DeSoto County, the trend is mirroring the national decline. Drivers in Southaven and Olive Branch are entering January with local averages hovering around $2.40 per gallon. This represents a nearly 20-cent decrease from the same period in 2025. For DeSoto County, gas prices average $2.36 a gallon.  

Analysts point to a global crude oil surplus, with prices stabilized between $50 and $55 per barrel, as the primary engine behind the lower costs. However, Mississippi drivers are also keeping an eye on the calendar; a scheduled state gas tax increase of three cents per gallon is set to take effect on July 1. 

The Great Divide: Hawaii vs. the Heartland

While much of the country enjoys sub-$3.00 fuel, geographic and regulatory factors continue to create a stark divide. Hawaii remains the most expensive market at $4.41, followed by California at $4.26. The gap between the most and least expensive states now stands at a staggering $2.19 per gallon.

“We are seeing a perfect storm of high domestic production and the typical post-holiday slump in travel,” said a AAA spokesperson. “For now, the advantage sits firmly with drivers in the Gulf Coast and the Great Plains.”

Key Points to Know

• National Average: The U.S. average for regular gas is $2.81 as of Jan. 4, 2026.
• Cheapest State: Oklahoma leads the nation with an average of $2.22.
• Most Expensive State: Hawaii remains the highest at $4.41.
• DeSoto County Trend: Local prices in Southaven/Olive Branch are roughly $2.40, down significantly from last year. DeSoto County’s average gas price for the entire county is $2.36.
• Future Outlook: A three-cent tax hike in Mississippi is looming for July 2026, but Q1 prices are expected to remain low.