As December 2025 draws to a close, drivers in Tennessee are finding some relief at the pump, with average gas prices dipping to their lowest point in months. According to data compiled by Stacker from AAA, the average price for a gallon of regular gasoline in Tennessee stood at $2.51 as of December 19, 2025. This marks a notable decrease of $0.09, or 3.5%, compared to just a week earlier. Year-over-year, the drop is even more pronounced, with prices falling by $0.22—or 7.9%—since December 2024.
These declines come as part of a broader trend seen across the United States, especially in regions west of the Suez Canal, where diesel and gasoline prices have recently tested fresh lows, according to Quantum Commodity Intelligence in its December 19, 2025, market report. The report highlights that the downward movement in fuel prices is not isolated to Tennessee but reflects larger global market dynamics and shifting commodity trends.
For Tennesseans, the relief at the pump is especially significant when viewed against the backdrop of recent history. The state saw its highest-ever average gas price—$4.64 per gallon—on June 12, 2022, a figure that still looms large in the memories of many motorists. Diesel users have also seen fluctuations, with current prices averaging $3.35 per gallon, a $0.05 (or 1.4%) decrease over the past week. However, unlike gasoline, diesel prices have actually risen by $0.10, or 3.2%, compared to the same time last year. The all-time high for diesel in Tennessee reached $5.64 per gallon on June 15, 2022.
So, where in Tennessee are drivers paying the most for gas right now? The latest figures from Stacker show that Jackson tops the list, with an average price of $2.57 per gallon. Nashville follows closely at $2.56, with Memphis at $2.54. Other cities rounding out the top five include Johnson City ($2.51) and Knoxville ($2.49). On the lower end of the spectrum, Chattanooga drivers are paying the least among major Tennessee metros, with an average price of $2.39 per gallon. The full list includes Cleveland ($2.48), Kingsport-Bristol ($2.47), Morristown ($2.46), and Clarksville-Hopkinsville ($2.40).
These local variations are part of a broader national patchwork of prices. Some states, particularly in the Midwest and South, are enjoying even lower prices than Tennessee. Oklahoma currently boasts the cheapest gas in the country at $2.34 per gallon, followed by Arkansas at $2.44 and Iowa at $2.47. The reasons for these regional differences are complex, involving everything from proximity to oil refineries and pipelines to state taxes and transportation costs.
On the flip side, drivers in states like Hawaii and California are facing much steeper costs. Hawaii leads the nation with an average price of $4.45 per gallon, while California is close behind at $4.32. Washington ($3.96), Alaska ($3.58), and Oregon ($3.56) round out the top five most expensive states for gasoline. The contrast is stark: a Tennessee driver filling up a 15-gallon tank pays about $37.65, while someone in Hawaii would shell out a whopping $66.75 for the same amount of fuel.
What’s behind these dramatic price swings, both in Tennessee and across the nation? According to Quantum Commodity Intelligence, the recent lows in gasoline and diesel prices west of the Suez Canal are linked to a combination of factors, including global supply dynamics, reduced demand in certain markets, and shifts in refinery output. While the details of these market forces are often buried in industry jargon, the upshot for consumers is clear: when global prices drop, local prices tend to follow—albeit with some lag and regional quirks.
The recent declines are also a far cry from the volatility seen in 2022, when geopolitical tensions and supply chain disruptions sent prices soaring to record highs. The spike in June 2022, when Tennessee’s gas hit $4.64 a gallon, was part of a nationwide surge that left many Americans scrambling to adjust their budgets. Since then, steady improvements in supply, changes in consumer behavior, and easing of some global tensions have helped bring prices back down.
Still, not all Tennesseans are feeling the same level of relief. For those who rely on diesel—think truckers, farmers, and logistics companies—the picture is a bit more complicated. While diesel prices have dropped slightly in the last week, they remain higher than last year’s levels, reflecting ongoing pressures in the freight and agricultural sectors. The historical context is important: diesel’s all-time high of $5.64 per gallon in June 2022 put a significant strain on businesses dependent on transportation and heavy machinery. The current price of $3.35, while lower, is still a reminder of how quickly markets can shift.
Regional disparities within Tennessee also play a role in how the average consumer experiences these price changes. Urban areas like Nashville and Memphis, with their higher population densities and greater demand, tend to see higher prices than smaller cities and rural communities. Factors such as competition among gas stations, local taxes, and transportation costs all contribute to these differences.
Looking beyond Tennessee, the national landscape remains a patchwork of highs and lows. States like Oklahoma and Arkansas benefit from their proximity to major oil production and refining centers, which helps keep transportation costs down. Meanwhile, states on the West Coast and in the Pacific pay a premium not only because of higher state taxes and stricter environmental regulations but also due to the logistical challenges of transporting fuel over long distances or by sea.
For everyday drivers, the weekly and yearly fluctuations can be both a source of relief and frustration. A $0.09 drop in a week might not sound like much, but over the course of a year, those savings can add up—especially for families who rely on their vehicles for work, school, and daily errands. Conversely, for those who remember the pain of $4.64 gas just a few years ago, today’s prices feel like a welcome reprieve.
As the year winds down, many Tennesseans are keeping a close eye on the pumps, hopeful that the downward trend will hold. Whether these lower prices will persist into 2026 remains to be seen, as global markets are notoriously unpredictable. For now, though, drivers across the state can at least enjoy a little extra change in their pockets—and maybe even a few more miles on the open road.
