By Oulaphone @Adobe Stock

The U.S. Energy Information Administration (EIA) forecasts a decrease in gasoline prices through 2026, driven by lower crude oil prices and reduced consumption from improved fuel economy. Prices are expected to drop 3% in 2025 and 6% in 2026. Regional price changes will vary, with the Rocky Mountains seeing stable prices and the West Coast facing increases due to refinery closures. They write:

In our January Short-Term Energy Outlook, we now forecast U.S. retail gasoline prices through the end of 2026. We estimate U.S. average gasoline prices in 2025 will decrease by 11 cents per gallon (gal), or about 3%, compared with 2024. In 2026, we forecast a further decrease of about 18 cents/gal, or an additional 6%. The lower U.S. gasoline prices are primarily a result of lower crude oil prices, as well as decreasing gasoline consumption in 2026 because of increasing fleetwide fuel economy. Decreasing U.S. refinery capacity over the forecast period may offset some of the downward pressure of lower crude oil prices on gasoline prices.

Our forecast for decreasing U.S. retail gasoline prices over the next two years follows the decrease from 2023 to 2024, after retail prices surged in 2022. We estimate the gasoline price decreases in 2025 and 2026 will be smaller than the decrease between 2022 and 2023, when prices fell 11%.

The smaller scale of the price decreases over the next two years is primarily because, although crude oil prices fall, that effect is offset somewhat by an increase in refinery margins. In 2023 and 2024, annualized gasoline prices decreased because both crude oil prices decreased and refinery margins narrowed. In 2025 and 2026, we expect lower gasoline prices will only be driven by lower crude oil prices. […]

On a regional basis, we expect gasoline prices to decrease in every U.S. PADD region in 2025 except the Rocky Mountains. The Rocky Mountain prices effectively remain flat in 2025 because of steady regional population growth, contributing to increasing gasoline consumption, while constrained regional production and transportation infrastructure limits the ability to increase gasoline supply in response.

In 2026, we expect prices to decrease on the East Coast and Gulf Coast, as well as in the Midwest and Rocky Mountains, but we expect them to increase on the West Coast. On the West Coast, we expect limited increases in consumption but reduced regional production in 2026 because of the Phillips 66 refinery closure.

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