"It's fourth quarter demand. There's always less demand for gasoline at the end of the year and that's what you're seeing. Plus there's plenty of supply of gasoline -- and oil," said trader Anthony Grisanti of GRZ Energy and a CNBC contributor.
(read more: Gasoline will get cheaper this winter: Pro)
Oil prices have also been declining rapidly. The benchmark U.S. oil price is at the lowest level since July. West Texas Intermediate crude futures hit a session low of $96.16 a barrel, sinking 4 percent in 3 days.
U.S. crude oil inventories have risen sharply since October 4 as refineries have slowed processing, due to seasonal maintenance operations and domestic oil production that continues to rise. Meanwhile total demand for oil and refined products has dropped to the lowest level since June.
It's good news for consumers. The national average for retail gasoline is $3.34 a gallon, down 4 percent or 13 cents from a month ago, according to AAA. In 10 states, prices are below $3.25 a gallon on average - and many drivers in Oklahoma, Missouri and Texas are paying less than $3 a gallon, according to GasBuddy.com.
"Drivers in nearly half the country could soon find gasoline prices at the pump below $3 a gallon," says Tom Kloza, chief oil analyst at GasBuddy.com. "This is the other shoe dropping. Since September, we saw gasoline prices lose ground even though oil prices were congesting. Now that crude oil prices are dropping, we could soon see retail gasoline prices at the lowest prices since the Arab spring in February 2011 -- below $3.20 a gallon for the national average."
—By CNBC's Sharon Epperson; Follow her on Twitter: @sharon_epperson