Gas Prices and Trends

Key takeaways:

• Changes in trade policy, namely tariffs, and oil production are expected to lower gas prices.

• Gas prices are expected to come down to around $3.10 a gallon in 2025 and 2026 from $3.30 a gallon in 2024.

• Still, there is uncertainty about how oil markets could react in the coming months if trade policy continues to change.

One benefit from tariffs could be seen at the pump.

Recent developments in global trade policy and oil production are expected to lower demand growth for U.S.-exported petroleum through 2026, sending gas prices down, according to the latest short-term outlook from the Energy Information Administration.

The EIA said it expects gas prices to be around $3.10 a gallon in 2025 and 2026, down from $3.30 a gallon in 2024.

"If the forecast holds, this price would be the lowest inflation-adjusted summer average gasoline price since 2020," the EIA said.

President Trump's announcements of tariffs sent the price of brent crude down 12% to $68 a barrel on April 2, the EIA said.

Inflation also declined in March for the first time in five years, largely because of lower gas prices, according to the Consumer Price Index.

But there is other uncertainty about the future of trade policy and how that will affect gas prices, the EIA said.

For instance, existing sanctions on Russia, Iran, and Venezuela, which could change, are also affecting oil prices, the EIA said.

Propane prices are also expected to lower due to tariffs weakening demand demand from China, which is a major importer of U.S. propane, the EIA said.

The EIA said it expects propane prices to fall to 50 cents a gallon in 2026 from 80 cents a gallon in 2025.

"Some propane previously exported to China will likely find new destinations." the EIA said.

Oil refineries in the U.S. get most of their crude oil from Canada, and after the U.S. slapped a 10% tariff on Canadian oil, industry experts predict gasoline prices would rise. So far, that hasn’t happened. Gasoline prices are falling, with the lowest March gas prices since before the pandemic.

AAA reports the national average price of regular gas is $3.08 a gallon, down two cents in the last week and six cents lower than a month ago. Last year at this time, a gallon of gas averaged 31 cents a gallon more.

So, what’s going on? For starters, the world price of crude oil is falling, thanks to growing supplies from Saudi Arabia. Oil futures markets have been weak lately over growing concerns about the global economy.

In the U.S., 23 states have average prices of regular gas below $3 a gallon. Mississippi has the lowest gas prices in the nation with an average of $2.64 a gallon. California has the most expensive gas in the nation, averaging $4.64 a gallon.

Bucking the seasonal trend

Normally, gasoline prices begin to rise at this time of year. Refineries reduce output so they can perform seasonal maintenance. In another few weeks they will switch over to producing summer grades of fuel, which are more expensive.

Even though motorists may be enjoying lower gas prices now, the lower prices may be a sign of economic trouble ahead. 

“Concerns about the direction of the economy could have a major influence on fuel prices in the months ahead, especially with the high level of uncertainty surrounding tariffs,” Patrick DeHaan, GasBuddy’s head of Petroleum Analysis wrote on the company’s blog.

“Additionally, OPEC+ announced last week that it would gradually begin restoring oil production after nearly two years of cuts, adding further downward pressure on oil prices. As a result, the typical seasonal rise in gas prices has yet to materialize, and if and when it does, it may be considerably smaller than expected.”