The U.S. Energy Information Administration (EIA) projected that the U.S. regular gasoline and U.S. on-highway diesel fuel retail price will drop both in 2025 and 2026 in its latest short term energy outlook (STEO).
According to this STEO, which was released on November 12, the EIA sees the U.S. regular gasoline retail price averaging $3.10 per gallon this year and $2.98 per gallon next year. The U.S. regular gasoline retail price averaged $3.31 per gallon in 2024, the EIA’s November STEO showed.
The U.S. on-highway diesel fuel retail price is projected to average $3.66 per gallon in 2025 and $3.50 per gallon in 2026 in the EIA’s November STEO. In 2024, the U.S. on-highway diesel fuel retail price averaged $3.76 per gallon, the EIA’s latest STEO highlighted.
A quarterly breakdown included in the EIA’s latest STEO forecast that the U.S. regular gasoline retail price will come in at $3.02 per gallon in the fourth quarter of 2025, $2.88 per gallon in the first quarter of next year, $3.04 per gallon in the second quarter, $3.09 per gallon in the third quarter, and $2.91 per gallon in the fourth quarter. The U.S. regular gasoline retail price averaged $3.10 per gallon in the first quarter of 2025, $3.16 per gallon in the second quarter, and $3.14 in the third quarter, the EIA’s November STEO showed.
Another quarterly breakdown included in the EIA’s latest STEO projected that the U.S. on-highway diesel fuel retail price will average $3.69 per gallon in the fourth quarter of 2025, $3.59 per gallon in the first quarter of next year, $3.41 per gallon in the second quarter, $3.47 per gallon in the third quarter, and $3.54 per gallon in the fourth quarter. The U.S. on-highway diesel fuel retail price averaged $3.63 per gallon in the first quarter of 2025, $3.55 per gallon in the second quarter, and $3.76 per gallon in the third quarter, the EIA’s November STEO showed.
“Lower crude oil prices will continue to push down retail gasoline and diesel prices in the United States in 2026,” the EIA said in its latest STEO.
“We forecast the average U.S. retail gasoline price to remain near $3.00 per gallon for the remainder of 2025, resulting in an average 2025 price of $3.10 per gallon, a six percent decrease from 2024,” it added.
“In 2026, we forecast the average retail gasoline price to fall by four percent to just under $3.00 per gallon, which would be the lowest annual average price since 2020. We forecast the U.S. retail diesel price will average almost $3.70 per gallon in 2025, down three percent from 2024,” it continued.
“Diesel prices are forecast to fall by another four percent in 2026. As with gasoline, lower diesel prices are primarily a result of lower crude oil prices,” it went on to note.
In its November STEO, the EIA highlighted that it expects the Brent crude oil price will average $69 per barrel this year and $55 per barrel next year. It pointed out in the STEO that this price averaged $81 per barrel last year.
“Crude oil is the largest component of retail gasoline and diesel prices, typically accounting for about half of the total price per gallon,” the EIA said in its latest STEO.
“As crude oil prices fall, the portion of retail fuel prices attributable to crude oil also falls. For retail gasoline, crude oil is expected to make up 53 percent of the price in 2025 and 44 percent in 2026,” it added.
“Similarly, for diesel, crude oil’s contribution to the retail price is forecast to be 45 percent in 2025 and 37 percent in 2026. If the 2026 forecast for diesel is realized, it would be the lowest crude oil contribution to retail diesel prices since 1998,” the EIA continued.
The EIA went on to state in its STEO, however, that “falling crude oil prices do not lead to a proportional drop in prices at the pump because the effect of lower crude oil costs is partly offset by rising crack spreads”.
“A crack spread is the difference between wholesale petroleum product prices and crude oil prices, broadly serving as a measure of refiners’ profit margins. Rising crack spreads can dampen the impact of falling crude oil prices for consumers,” the EIA noted.
“We forecast diesel crack spreads to rise from an average of $0.52 per gallon in 2024 to $0.69 per gallon in 2025, reaching $0.84 per gallon in 2026. In the gasoline market, we similarly forecast strong crack spread gains for 2025 and 2026,” the EIA added.
According to the AAA Fuel Prices website, the average price of regular gasoline in the U.S. is $2.998 per gallon, as of December 2. Yesterday’s average was $3.001 per gallon, the week ago average was $3.055 per gallon, the month ago average was $3.036 per gallon, and the year ago average was $3.047 per gallon, the site outlined.
The AAA Fuel Prices website showed that the average U.S. diesel price was $3.739 per gallon on December 2. Yesterday’s average was also $3.739 per gallon, the week ago average was $3.785 per gallon, the month ago average was $3.684 per gallon, and the year ago average was $3.536 per gallon, the AAA Fuel Prices website highlighted.
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