How Are Gas Prices Expected to Look In 2023?

The past year has been a financial strain for many Americans due to the rising cost of gas. According to a GOBankingRates review, 25% of respondents stated that rising gas prices were the most influential economic factor on their finances. This is not surprising, as U.S. gas prices this summer reached the highest levels since 2018. In June 2022, gas prices peaked at $5 per gallon, leading some customers to pay $60 for 12 gallons and $100 for 20 gallons.

However, as gas prices have recently dropped to more reasonable levels in most states and even below $3 per gallon in some, Americans are hoping that trend will continue in the new year. Whether or not the lower gas prices will be sustained in 2023 remains to be seen.

Gas Prices Are Falling

In the review, 30% of survey respondents expressed a desire for substantially lower gas prices by 2023, which has been the trajectory of gas prices lately.

AAA reports that the national average price at the pump has decreased week over week, reaching $3.21 on December 14th. Compared to this time last year, this is a reduction of 11 cents.

Are Gas Prices Expected to Continue Decreasing in 2023?

Industry experts generally agree that gas prices will continue to decrease in 2023, though it may not be as significant or long-term as consumers desire.

During January of 2023, consumers can expect good news concerning future gas prices during a time when refineries are suffering due to a diesel shortage that is forcing them to operate at full capacity, leading to a surplus of gasoline. This is a demand about 7% lower than at the same time last year.

It is predicted that the price of gasoline will drop below $3 per gallon in the U.S. Consumers will experience the lowest prices of the year in January of 2023. However, as refiners switch to producing summer blends in February, prices will likely increase.

The AAA reports that fuel prices in numerous states have dropped below $3 per gallon, with Texas having the most affordable prices, with an average of $2.67 per gallon.

Prediction for Average Gas Prices in 2023

The U.S. EIA’s short-term energy outlook report from December 2022 predicts that gasoline prices will drop in the coming months but begin to rise again in February 2023. The EIA estimates that by the end of the year, a gallon of regular gasoline will cost an average of $3.51, a decrease from the average price of $3.99 in 2022.

It is uncertain what will happen to gas prices in the next year due to the unpredictability of the oil industry. Americans should hope for the best but also be prepared to budget for occasions when they may need to pay a bit extra at the pump.