GasBuddy is forecasting a decrease in gas prices for the third consecutive year, with the national average expected to fall to $3.22 a gallon in 2025. This marks a modest decline from last year’s average of $3.33 and will be the lowest annual average since 2021.
The forecast is a significant change from the spike above $5 a gallon nationally in mid-2022, which caused widespread inflation and economic disruption. Americans can expect to save about $115 billion less on fuel next year compared to 2022.
Patrick De Haan, GasBuddy’s head of petroleum analysis, notes that while there is some uncertainty due to factors such as President-elect Donald Trump’s policies, the forecast suggests “slow-but-steady improvement” at the pump. However, De Haan warns that Trump’s actions could disrupt this trend, and industry experts are skeptical of his claims to bring gas prices below $2 a gallon.
The US is already producing more oil than any other country in history, but there is limited room for further growth, according to senior portfolio manager Rob Thummel. Unleashing too much supply could lead to a glut, causing energy prices and the oil-and-gas sector to suffer.
Despite these challenges, GasBuddy’s forecast suggests that gas prices will remain below $3.50 a gallon throughout 2025, even during peak driving season. The typical household can expect to spend around $2,252 on fuel next year, which is above the pre-Covid level but significantly lower than the record high in 2022.
A full-blown trade war between the US and its North American neighbors could lead to a dent in demand for fuel, causing prices to drop even further. However, GasBuddy assumes that Trump will not impose a 25% tariff on Canadian and Mexican oil, which would have lifted retail gas prices by 30 cents to 70 cents a gallon.
Source: https://edition.cnn.com/2024/12/30/business/gas-prices-trump-2025-gasbuddy/index.html