Grace Beahm // The Post and Courier

Although South Carolina has the lowest gasoline prices in the country, Charleston’s $3.67 average is the state’s highest.

South Carolina has the nation's cheapest average gas prices, according to AAA Carolinas, which predicts a 3 percent increase in the number of people traveling this holiday weekend.

The 423,000 South Carolinians forecast to hit the roads live in a state where residents spend a bigger percentage of their income on gas than just about anywhere else in the country, according to a report scheduled for release today.

Gasoline prices have dropped 16 cents since peaking on May 12, giving the state the nation's cheapest average price, $3.59, for a gallon of regular unleaded, said AAA Carolinas.

Charleston has the state's highest gas prices at $3.67 on average. South Carolina's cheapest gas is in Greenville at $3.54. North Carolina's average for a gallon of regular unleaded gasoline is $3.73, according to AAA.

Another factor fueling the expected travel increase is an unemployment rate drop of 1.5 percent from April 2010, according to AAA.

Although gas is relatively cheap here, only Mississippians spend a greater percentage of their annual income on fueling the car or truck than South Carolina residents, according to the Natural Resources Defense Council, which today called for fuel efficiency standards of 62 miles per gallon by 2025.

South Carolinians in 2010 on average shelled out 6.3 percent of their yearly income on fuel. That translates to $2,093. The NRDC points out that if vehicles had a 60-miles-per-gallon fuel standard, Americans would save an estimated $67 billion and reduce gasoline consumption by 17 billion gallons this summer.The average American family would save more than $500 in just three months.

"As Americans take to the road this holiday weekend, they'll quickly realize the answer to high gas prices and America's energy woes isn't how many more drilling rigs we erect off our beaches, but how much gas they have in their tanks and how far it will take them," the NRDC says.

The overall high cost of gas -- prices are up 23 percent since the first of the year -- has kept Katelyn Brondsema, 21, of James Island closer to home. She relies more on carpooling, and hasn't spent as much time with friends at Winthrop University because of the $80 round-trip cost.

"I used to go there a lot to visit. I haven't been traveling much," Brondsema said.

Her Mazda gets 32 miles per gallon, which comes in handy while driving around town to manage Italian ice carts. It costs almost $500 per month in gas to ferry her brothers from James Island to Wando High School, she said.

On Wednesday, the Thomas family of Chattanooga, Tenn., was looking forward to a cruise from Charleston to the Bahamas. They talked about their plans while parked at the Kangaroo on East Bay Street.

"You do have great gas prices," said Sharon Thomas. She and her husband, Randy, along with their children Kinsey, 10, and Cody, 15, drove here because it was the closest port.

Meanwhile, hotel bookings are up 4 percent over last Memorial Day weekend, according to AAA Carolinas.

The biggest local oceanfront hotel, Tides Folly Beach, is completely booked for Friday through Sunday.

"It really is kind of our kickoff for the beach season and the summer season," said Bryan Ross, Tides revenue manager.

Fuel is cheaper in South Carolina because the state gas tax of 16.8 cents per gallon is one of the lowest nationwide. And the state is close to a refinery in Savannah, said AAA spokesman Brendan Byrnes.

There are also four refineries in Alabama that provide a relatively close, plentiful supply of gas to the region, he said.

Internationally, a slight decline in gasoline demand and worries about the economic state of several European nations contributed to a significant drop in oil prices, he said.

This decline is still working its way through the gasoline market and consumers can expect gasoline prices to continue dropping throughout the holiday weekend, he said.

Air travel is forecast to increase 3 percent with about 35,500 South Carolinians flying during the weekend. Some 30,000 people are expected to travel by bus, train or ship.

About 88 percent of those traveling 50 or more miles away from home will drive, according to AAA Carolinas.