In a holiday gift to motorists, 2024 ended with the lowest gasoline prices of the year. According to industry forecasts, that trend could continue in 2025, at least in the first quarter.
In its 2025 Fuel Price Outlook, GasBuddy said it expects a third consecutive year of lower gas and diesel prices. Contributing factors include potential impacts on production, supply and demand changes, as well as a change in leadership in Washington.
According to the forecast, the yearly national average price for gasoline could fall to $3.22 per gallon, down from $3.33 in 2024. The record-high prices of 2022 are far behind in the rearview mirror.
That said, GasBuddy is hedging its bets, noting there are uncertainties such as geopolitical tensions, potential tariffs and a change in energy policies that could add some risk to this year’s forecast.
The highlights
Here are some of the highlights of this year’s forecast:
Lowest Monthly Average in December: The national average price of gasoline is expected to hit its lowest point in December, averaging $2.89 per gallon for the month. That would be slightly less than December 2024’s average.
Springtime Spike: Gas prices may peak 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, driven by seasonal increases in demand and the change to summer gasoline that occurs coast to coast at a varied pace. Prices generally rise in the weeks leading up to Memorial Day.
Regional Variations: 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.
On the other hand…
But when it comes to fuel prices, there are no guarantees. All it takes is a war or a hurricane to spike prices at the pump.
“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.”