Retail Gasoline Prices to Fall in 2025-2026 Amid Lower Crude Oil Prices, Weaker Consumption: EIA

U.S. average retail gasoline prices during 2025 are estimated to decline by 11 cents per gallon (gal), or three percent compared to 2024, and a further 18 cents/gal, or six percent during 2025, according to an Jan. 22 report published by the U.S. Energy Information Administration.  The price decrease over the next two years can be attributed to lower crude oil prices and declining gasoline consumption in 2026, due to increasing fleetwide fuel economy. Lower U.S. refining capacity over the next two years could offset some of the downward price pressure of weaker crude oil prices on gasoline prices.

Brent crude oil prices are expected to decline from an average of $81 per barrel (b) during 2024 to $74/b in 2025 and $66/b in 2026. The agency’s price decline expectations can be attributed to slower demand growth and robust global growth in production of petroleum and other liquids. Voluntary production reductions from OPEC+ members and heightened geopolitical risks will continue to provide prices with underlying support over the next two years.

U.S. retail gasoline prices also declined during 2023 and 2024, in line with lower crude oil prices and narrow refinery margins. The decline during 2023 and 2024, follows a significant price increase during 2022. Rising crude oil prices and increased gasoline demand early in 2022 contributed to rising U.S. retail gasoline prices in summer 2022.  The agency projects average gasoline price reductions during 2025 and 2026 to be smaller than the 11 percent price decline evident between 2022 and 2023. The smaller percentage of price decline over the next two years is because  an increase in refinery margins is expected to offset lower crude oil prices. The agency projects gasoline crack spreads during 2025 to be wider than they were in 2024, in line with the agency’s forecast for reduced U.S. refinery capacity in 2025 compared to last year.

The agency also projects a marginal increase in U.S. gasoline consumption during 2025. Moreover, the agency expects gasoline consumption during 2026 to decline compared to 2025 due to rising vehicle fleet efficiency. The increasing fleet efficiency is due to both enhanced fuel economy in cars with conventional internal combustion engines and a higher share of electric vehicles in the U.S. passenger vehicle fleet.