PORTLAND, Ore. (KOIN) — The annual average price for a gallon of gas in the U.S. is expected to drop to $3.49 cents in 2023, nearly 50 cents cheaper than the annual average in 2022, according to GasBuddy’s 2023 Fuel Outlook.
Low seasonal demand and improvements in refinery capacity are expected to push gasoline and diesel prices lower in the new year. However, GasBuddy reports that the Russian invasion of Ukraine will continue to create “high levels of uncertainty.”
Seasonal price spikes are also expected in 2023. GasBuddy petroleum analyst Patrick De Haan said that a $4 national average will be possible during the spring and summer months as more people hit the road.
“2023 is not going to be a cakewalk for motorists,” De Hann said. “It could be expensive. The national average could breach $4 per gallon as early as May – and that’s something that could last through much of the summer driving season. Basically, curveballs are coming from every direction. Extreme amounts of volatility remain possible but should become slightly more muted in the year ahead.”
The anticipated price drop is estimated to save Americans $55 billion in gas expenses compared to costs in 2022. The savings would reportedly lower the estimated annual household gas expense to $2,471.
While the national average is expected to fall, areas of California like San Francisco and Los Angeles may see prices near the $7-per-gallon mark again in the summer of 2023 as refineries adjust between winter and summer blends. Oregon and Washington face similar risks for more-dramatic summer price spikes due to less competition among local refineries, the report states. Meanwhile, California, Oregon and Washington continue to work toward banning the sale of new, gas-powered vehicles by 2035.
“In areas such as the West Coast, where gasoline is produced by a small number of dominant refineries, motorists are most susceptible to severe price spikes, triggered when local refineries hit unexpected snafus, even brief ones, especially during a time of year when refineries are transitioning to a larger slate of localized blends. In addition, pipelines that carry refined fuels have had unexpected shutdowns in recent years that may also affect the price of fuels and delivery of fuels to the retail level.”