Gas prices over $3.50 per gallon are seen at a service station in San Francisco, California, May 7, 2007. Getty Images/Justin Sullivan

The American Automobile Association (AAA) said Monday the average gas price before July 4 this year was the cheapest compared to the last 12 years.

A gallon of regular gas is presently priced at $2.23, four cents cheaper than it was this time last year. The price of gas had spiked up after the Organization of the Petroleum Exporting Countries (OPEC) announced production cuts in December 2016. However, it was not enough to keep the prices high for long.

There are a number of factors that influence the price of gasoline at any given time. While aspects like refining costs, distribution costs, taxes and marketing do partially determine the cost of gas, the most important factor in the equation is the cost of crude oil. About 46 percent of the price of gas is regulated by the rise and fall of crude oil prices, which fluctuates in accordance with political trends, weather and seasonal conditions, the value of the U.S. dollar as well as the stability of oil producing nations, the Week reported.

"It's mostly about the price of crude," said Tom Kloza, the chief oil analyst for the Oil Price Information Service, which tracks pump prices for AAA, CNN Money reported.

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One of the significant spikes in gasoline prices happened in 1979, when the Middle East was reeling from the Iranian revolution.

However, despite political and economic tensions brewing currently in Libya and Nigeria, two of the major oil producing countries in the world, crude oil output from these countries remained unaffected. One of the reasons behind this could also be because OPEC had exempted the two countries from the production cuts.

“Despite the violence and all the chaos that those countries have, they produced about as high as they would if everything was just hunky dory,” Kloza said, CBS Local reported.

Cars line up to buy discounted gas at a Citgo gas station in Woburn, Massachusetts, May 26, 2000. Getty Images/Darren McCollester

Kloza also added it was rare seeing the oil prices dip this low in the month of July since refiners tend to make more expensive forms of gasoline during the summer season. He expects the oil prices to be on the upward trend by the end of summer. However, he insisted that people not worry about it too much because is supposedly just a passing phase.

“It’s like the fever, it won’t last, and will be cheap by the time whatever kind of shopping season we have rolls around in the fall,” he said.

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The city with the lowest gas prices in the United States at present is Cleveland, Tennessee. Gas prices there fell 1.3 cents per gallon last week. By Monday, residents could get gas for as low as $1.67 at several gas stations across Cleveland, Time Free Press reported.

"I buy gas most every day for my lawn mowers and Weed Eaters during the summer so these prices are really helping my business," Billy Stowe, a Cleveland resident said Monday at the Hi-Tech station. "I shop around a lot for gas and right now it's great in Cleveland."