With inflation still stressing out absolutely everyone and family budgets remaining tight, we're kind of all looking for something to give. For people who drive a lot, a huge budget item is gasoline, and the dramatic rise in the cost at the pump over the last few years has definitely gotten the attention of nearly everyone.
But when will gas prices go down? Or will they? That's the big question.
Gas prices and the presidential election
Since it's an election year, the expectation is that gas prices will drop as the election approaches, but this isn't exactly the revelation that people think it will be. Although gas prices have fallen between June and November for five of the last six presidential elections, it's been by incredibly small amounts -- except in 2008, when the economy almost entirely collapsed.
So, technically speaking, yes, prices are likely to drop by November, but probably not enough to even overcome inflation.
| Election Year | Gas Price in June | Gas Price in November | % Change in Price |
|---|
| 2024 | $3.601 | N/A | N/A |
| 2020 | $2.076 | $2.090 | 0.67% |
| 2016 | $2.225 | $2.187 | (1.71%) |
| 2012 | $3.552 | $3.488 | (1.80%) |
| 2008 | $4.065 | $2.151 | (47.10%) |
| 2004 | $2.041 | $2.010 | (1.52%) |
| 2000 | $1.617 | $1.555 | (3.83%) |
Data source: Federal Reserve Bank of St. Louis. Chart by author.
The EIA and gasoline predictions
The U.S. Energy Information Administration (EIA) has also taken a stab at predicting where gas prices may go, election superstitions totally aside. Back in January, it released its detailed Short-Term Energy Outlook (STEO), which by many standards might look kind of long term. Back then, the EIA predicted a leveling-off of prices, with gasoline averaging $3.36 per gallon for 2024 and $3.24 per gallon for 2025.
More recent forecasting, as of July 9, 2024, shows that gasoline prices are expected to remain a bit higher, at $3.40 for 2024 and $3.50 for 2025. So, we may be in for a slight decline in the next 18 months, but the powers that be do not see much of a change when it comes to the price of gasoline.
Crude oil futures contracts are also not giving a lot of indication that anything exciting is afoot, since they've remained more or less level for the last year. On July 24, 2023, contracts were at $78.74 per barrel; today they're at $77.26, which is just a 1.88% decrease year over year. Since crude oil makes up 55% of gasoline prices at the pump, essentially no change in futures means no likely change in gasoline prices in the near future, either.
Preparing for heavy long haul fuel prices
It looks like we're going to be in this gas price cycle for some time, so this may be time to make a significant switch in how you drive or what you drive. For example, commuters may want to consider trading their vehicles in for smaller, more fuel-efficient cars, or choosing a hybrid or electric vehicle if that's in the budget.
Others may want to look into ways to save more on the gasoline they do buy, like using an app that gives them the best gas prices in their area. Costco is another option for drivers who are located near a Costco gas station, where a gallon of gas is often $0.10 or more below the competition.
You'd want to make sure that you'll use at least 600 gallons of gas in the next year to justify the $60 membership fee (if you'll only be using it for the benefit of cheaper gas). But if your car gets 25 miles per gallon, and your daily commute is the average 42 miles total, with you and a spouse commuting separately, you only need about six months to burn that much fuel on commutes alone (that doesn't count weekend soccer games or dance recitals, if they apply).
Gasoline prices are holding steady
Unfortunately, gas prices are looking like they will hold steady for the next year or so, according to experts, as well as supporting data related to the cost of gasoline production. It's not the news you probably wanted to see, but at least it's not a prediction that gas prices are about to get worse, so there's that.
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FAQs
Even the U.S. Energy Information Administration has predicted that gasoline prices will stay more or less on par through the end of 2025. It may be time for commuters to find cheaper gas using discount programs, or trade in their vehicles for more fuel-efficient ones.
Will gas prices ever go down to normal? ›
Kloza predicts that the average price for gas in 2023 will be “about $3.52 a gallon” by the time the ball drops in Times Square. He and other experts predict that average gas prices in 2024 will be slightly lower. Next year “should be a little bit more friendly at the pump,” De Haan said.
Will gas be cheaper in the future? ›
EIA expects average U.S. gasoline and diesel prices to decrease in 2024 and 2025. In our January Short-Term Energy Outlook (STEO), we expect average U.S. retail gasoline prices to decrease in 2024 because of increased inventories related to increased refinery capacity.
What will happen if gas prices keep going up? ›
Rising gas prices may force some businesses to re-evaluate their hiring plans, holding off because they are uncertain about the economy's health. Less discretionary spending results in decreased sales, both of which can influence a company's ability to hire.
Will gas ever be 1 dollar again? ›
Will gas prices drop to $1 per gallon ever again? - Quora. No because the costs involved in producing a gallon of gasoline, from purchasing the oil, refining, transporting to a retail site is more than $1.
How long will gas be expensive? ›
Patrick De Haan, head petroleum analyst at GasBuddy, said he expects average gas prices to reach a peak in April and May, noting he “fully expects” thousands of gas stations in the U.S. to offer gas at $2.99 per gallon by the last quarter of 2024.
What will happen to gas cars after 2035? ›
Can I still drive my gasoline car after 2035? Yes. Even after 2035, gasoline cars can still be driven in California, registered with the California Department of Motor Vehicles, and sold as a used car to a new owner.
How much will gas cost in 2024? ›
U.S. Regional Gasoline Prices as of July 23, 2024
Prices on the west coast continue to slowly move to the $4 line. The national average price of gasoline is down ever so slightly, at $3.47 per gallon, according to EIA data. The 2-cent drop on the national average comes despite one region seeing a 5-cent increase.
Why is gas going up in July 2024? ›
California continues to lead the nation with the highest gas tax in 2024, which climbs to 69.8 cents per gallon as of July 1. This increase pushes the Golden State's average price for a gallon of regular gasoline to about $4.79. In other tax news, California also has a new gun and ammo tax effective July 1.
Who controls the gas prices in the United States? ›
Petroleum prices are determined by market forces of supply and demand, not individual companies, and the price of crude oil is the primary determinant of the price we pay at the pump.
The cost to refine crude oil into gasoline, including occasional refinery production shutdowns, scheduled and unscheduled. Seasonal factors, such as changing from cheaper gas blends used in the winter, leading to a natural price spike in the spring. Spot shortages, sometimes caused by geopolitical tensions.
Where is gas cheapest in the US? ›
Mississippi has the lowest price of gas, with an average of $2.97 per gallon of regular gas.
What state has the worst gas prices? ›
The American Automobile Association tracks average gas prices in every state. Mississippi has the lowest gas prices with an average cost of $2.937 per gallon. California's gas prices are the highest in the US with an average cost of $4.794 per gallon.
What is the highest gas price ever recorded? ›
According to CNN Business, the price of gas at the pumps across the nation met an all-time-high average of $5.02 per gallon on June 14, 2022.
What will gas cost in 2024? ›
According to the most recent data, the forecast for the average U.S. fuel retail prices in 2024 is: Gasoline – $3.31/gallon. Diesel – $3.92/gallon.
Will prices ever go down? ›
They're most likely gone forever. That's because prices, on average, are a one-way ticket, generally rising over time, and falling only when something has gone wrong with the economy. Officials at the Federal Reserve who set the nation's monetary policy are determined to keep it that way.
