2025 Fuel Price Forecast

Americans are expected to continue to see relief at the pump this year. In a new report, GasBuddy projects that gas prices will decline for the third year in a row. It predicts that this year's national average gas price will decline to $3.22 per gallon,  down from $3.33 in 2024 and way below the record highs of 2022.  However, GasBuddy warns there are still some uncertainties ahead  - like geopolitical tensions, potential tariffs and a change in energy policies -  that add risk to this year’s forecast.

Highlights from GasBuddy’s 2025 Fuel Outlook:

• Lowest Monthly Average in December:   Gas prices will be at their lowest this year in December, according to GasBuddy, when it's expected to average $2.89 per gallon for the month.
• Springtime Spike:Gas prices could be at their highest of the year in April at a monthly average of $3.53 per gallon, while the daily average could top out as high as $3.67 per gallon. GasBuddy attributes that to seasonal increases in demand and the change to summer gasoline that occurs coast to coast at a varied pace.
• Regional Variations: As always things will vary by region. While most major U.S. cities will see peak gas prices around $4 per gallon, West Coast cities such as Los Angeles and San Francisco could return to the mid-$5 per gallon range due to high fuel taxes, unique fuel requirements and other state mandates.
• Lower Consumer Spending: Americans are expected to spend a combined $410.8 billion on gasoline in 2025, an 8% decrease from 2024's estimated $423.1 billion.

"While declining fuel prices in 2025 will provide welcome relief to American drivers and businesses, emerging risks could lead to increased volatility," said Patrick De Haan, head of petroleum analysis at GasBuddy. "Geopolitical uncertainties, potential disruptions from extreme weather, and policy shifts under the new administration could create challenges for fuel markets. Despite this, expanding global refining capacity and moderating demand are expected to support lower prices for most of the year."

If you drive a diesel - good news there, too. Diesel prices are also forecast to drop in 2025, with a projected yearly national average of $3.48 per gallon. GasBuddy says this reduction will benefit industries dependent on diesel, such as freight and agriculture, offering some respite from recent cost pressures.

Download the full 2025 Fuel Outlook here.

Photo Credit: welcomia/Shutterstock.com.